New options to pay your provisional tax from March 2018

Jonathan Roberts from Moore Stephens Markhams Chartered Accountants compares the different ways to pay your tax following the Government’s recent changes to provisional tax. Download the article in Contact November 2016

Earlier this year, the government announced there would be some changes to provisional tax. These changes are designed
to make paying provisional tax easier and fairer for taxpayers. The table below summarises the new options.

 

New tax options 2018

 

These changes are all designed to either increase the accuracy of the provisional tax instalments compared to the final income tax required, or reduce the penalties when the final income tax liability ends up higher than the provisional tax paid.
The main changes are the increase of the Safe Harbour threshold to $60,000, interest being charged only from the third instalment of provisional tax for those using the Standard Method, and the introduction of the Accounting Income Method where the actual profit calculated using your accounting software will be used to determine the provisional tax required.

These new options are available from the start of the March 2018 Income Tax Year with the exception of the Accounting
Income Method which is due to be introduced in the March 2019 year.

Contact your Moore Stephens Markhams advisor to discuss further if you have any questions.

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