Question of the Month: March 2025
Logan Jessop, Client Solutions Expert
It's time for another Question of the Month.
And this question is timely if you have clients who need to set up their tax pooling arrangements with Tax Traders to settle their 2024 income tax liabilities.
Let's get into it.
With important cut-off dates for the 2024 tax year approaching, how can I quickly identify which clients need to complete transactions before the legislative deadline?
If you’ve got a large portfolio of clients, it can be tough to remember all their tax pooling arrangements and tax needs.
To save yourself time and ensure you’re on top of your game, make sure you take advantage of our Cut-Off Report, which helps you keep track of all clients in the lead-up to a legislative deadline to ensure they avoid use-of-money interest and late payment penalties.
The report provides you with a list of taxpayers who have:
- Tax balances held in the Tax Traders tax pool which have been identified as being related to tax dates for the closing tax period and may need to be transferred to Inland Revenue (referred to as ‘current balances’).
- Incomplete finance or buy arrangements in place for the current year (referred to ‘incomplete purchases’).
Where can I find the Cut-Off Report?
Simply click the reports dropdown in the main header of the Tax Traders portal to access your Cut-Off Report.
How do I utilise the Cut-Off Report?
For individual clients with current balances, you can use our RIT Tool or Combined Report to calculate their transfers. For clients depositing into a group with multiple entities, you can use our swap and transfer tools to achieve the tax position for the associated entities.
If your clients have any remaining balances, ticking ‘Hold in pool’ and completing the form will remove the taxpayer from the list.
As for those clients with incomplete purchases, make sure current orders are paid on time (particularly those falling on the cut-off date). For overdue orders, please contact us to get a new price or cancel any orders that are no longer required.
We recommend using the Cut-Off Report in tandem with the Global Balance Report.
The Cut-Off Report displays a list of clients with a specific terminal tax date who have balances which are more likely to relate to the dates for the 2024 tax year, whereas the Global Balance Report shows a list of all client balances in the tax pool.
What is Question of the Month?
Every month, we answer a question that relates to tax pooling, provisional tax or the leading-edge smart tools we’ve developed to simplify your workflow.
Our aim is to provide you with useful tips or information to help you deliver the best outcome for your clients.
Make sure you check out the answers to some of the previous questions we've answered below.
February 2025
IR is applying a client’s refund towards an underpaid provisional tax instalment for the 2025 tax year. I’m reluctant to switch my client to the estimation method to free up this refund given the potential use-of-money interest implications for them. How can tax pooling assist?
January 2025
A salaried employee received one-off income after selling cryptocurrency without tax being deducted. Will they be exposed to use-of-money interest if they did not pay provisional tax during the 2024 tax year?