Changes to Use of Money Interest
Previously Use of Money Interest charges from IRD were back dated to the date of your first instalment of provisional tax. This could sometimes prove to be a bit of a problem for clients where income went up unexpectedly through the year – for example if the milk pay-out increased in the later part of the season, you could end up with a use of money interest bill even though you paid the required amount of provisional tax on each due date.
For the financial year we are in now (2018) this is no longer the case. For normal provisional tax payers, interest will only be imposed from the date of your third instalment of provisional tax – and then only if the total amount of tax you pay is over $60,000. This is a really sensible change which makes managing your tax a lot simpler.