What is tax pooling?
Tax pooling simply allows you to pay tax when you want to pay it.
You need to pay tax to IRD, if you have 31 March balance date, on three dates which are August 28, January 15 and May 7 but you don’t have to if you are using tax pool.
You can actually pay tax when it suits you. You’ll still have to pay it but it will help you pay it when you want to which can help your cash flow situation.
Tax Pooling is an intermediary between a business and the IRD to allow the business to use tax credits which are available through overpayments by larger tax payers. This means that if you were late in paying tax, you could use their credit to effectively ensure you have paid it on time.
Tax pooling provides solutions that if you do get caught behind in tax, haven’t paid at all or if you get a tax surprise from the IRD that you feel you can’t pay immediately.
The benefit of using tax pooling is to avoid exposure to IRD penalties which can be costly and the interest rate charged through tax pooling is usually lower than that of the IRD’s.