Construction firm manages cash flow with Taxi

The backdrop

 

A mid-sized construction company operating in Christchurch specialises in multi-unit developments and seismic strengthening projects.  

 

Heading into the August provisional tax period, the business was navigating challenges typical of the current economic climate: project delays due to council sign-offs, rising material costs and subdued demand across the sector. 

 

The decision 

 

Instead of paying $150,000 in provisional tax directly to Inland Revenue (IR), the firm opted to deposit the amount using Taxi.  Taxi uses your provisional tax to secure access to funding for when you need it most.

 

With New Zealand's economy experiencing slower growth and weakened confidence, they wanted a responsive funding option that could adapt to shifting business conditions. 

 

Why it makes sense

 

In early September, two delayed projects created a gap in expected cash inflows. Payroll was due and a time-sensitive opportunity to bulk-purchase discounted materials arose. 

 

The company accessed $135,000 of its tax pool deposit the next business day using Taxi, without needing to apply through a bank or offer additional security. It was a practical, compliant way to stay liquid in a tighter financial environment. 

 

Quick comparison:  Tax Traders/Taxi vs. alternatives

Feature 

Tax Traders/Taxi 

IR direct payment 

Bank overdraft 

IR compliant 

Yes 

Yes 

Not designed for tax 

Cash access 

Next business day via Taxi 

Funds locked until return  

Yes – but often costly and slow 

Security required 

No 

N/A 

Yes 

Approval process 

No 

N/A 

Yes – lengthy and with conditions 

Interest cost 

Competitive rate of 5.90% 

N/A 

Typically double-digit interest 

IC risk 

No 

No 

N/A 

 

Strategic use

 

  • Maintained staffing levels during delayed income periods. 
  • Locked in discounted materials before prices rose further. 
  • Avoided drawing on an expensive overdraft line.

 

By leveraging Taxi funding, the firm preserved operational stability without compromising its tax obligations – a smart move.  

 

Visit gotax.co.nz for more information. 

 

Disclaimer: The information in this article is Tax Traders’ general view, intended to provide enough information to inform you about this topic generally as at the date of the article, rather than comprehensive information for all situations. This article should not be relied upon to make decisions. Tax Traders recommends you seek professional advice as appropriate for your circumstances. Rates are accurate at time of publication and subject to change.