Keep cash flowing during economic uncertainty

 

New Zealand’s economy is challenging right now.  

 

Food prices remain elevated, interest rates are still high, and growth across sectors is uneven. With GDP down 1.1% on an annual average basis and unemployment sitting at 5.2%, many businesses are feeling the pressure – balancing caution with the need to stay agile given the current outlook.  

 

In this uncertain economic environment, Tax Traders can help your clients hold on to their cash at a time when they need it most.  

 

How?

 

For a small upfront interest cost, your client can push out their upcoming provisional tax payment, while remaining compliant with Inland Revenue (IR).

 

That means instead of depleting their working capital, your clients can delay a significant business outflow, keeping more cash to respond to changing circumstances.  

 

It’s secure, IR-compliant and doesn’t require traditional lending approvals or collateral. 

Your client chooses the amount of tax they wish to defer paying and the date in the future they wish to pay. For provisional tax due on 28 August, your clients could enjoy up to 22 months* breathing room.  

 

Why it makes sense

 

  • Preserve operating cash: Keeps funds in your clients’ businesses when expenses are climbing. 
  • Navigate uncertainty: Repay tax when profitability stabilises or when cash flow improves. 
  • Avoid high-cost borrowing: Upfront interest cost is cheaper than the rate of a bank overdraft. 
  • Smooth out lumpy income: Ideal for seasonal businesses or those facing delayed payments. 
  • Stay ready: With more cash available, clients can act should things change suddenly. 

 

Quick comparison: Tax Traders vs. alternatives 

Feature 

Tax Traders 

IR direct payment 

Bank overdraft 

IR Compliant 

Yes – up to 22 months* to pay

Yes 

Not designed for tax 

Upfront cash outflow 

No – just a small interest cost 

Yes – full provisional tax amount 

No 

Security needed 

No 

No 

Yes 

Approval process 

No  

N/A 

Lengthy and slow

Interest cost 

Low – rates start from 5.19%, depending on tax amount and term 

9.89% UOMI plus late payment penalties 

High – typically double-digit interest 

 

It would cost $1,740 with Tax Traders for a client to delay a $30,000 provisional tax payment for 12 months.  

 

How it works 

 

1. Ahead of 28 August, your client pays Tax Traders the upfront interest amount. The interest amount is based on the tax amount they need and the date in the future they would like to pay. Tax Traders holds a date-stamped deposit in its tax pool account at IR on your client’s behalf. 

 

2. Your client then pays Tax Traders their tax at the agreed future date. Tax Traders arranges for the date-stamped tax amount to be transferred from our Inland Revenue account to your client’s Inland Revenue account. 

 

3. IR recognises that your client has paid on time once it processes this transfer, removing interest and late payment penalties showing on your client’s account. 

 

With higher costs and uncertain demand, helping clients keep cash in their business isn’t just smart – it’s essential. Tax Traders gives them a simple, trusted way to preserve working capital while still staying tax compliant. 

 

Help your clients hold onto their cash. Set up an arrangement with Tax Traders to delay their 28 August provisional tax and give them room to move. 

 

*Based on a March balance date taxpayer with extension of time. 

 

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.