Provisional Tax Due 28 August – Are You Prepared?

If your business has a 31 March balance date and you're using the standard uplift method, your first provisional tax payment for the 2026 income year is due on 28 August 2025.

This deadline is a key date on Inland Revenue’s calendar. Preparing early can help you avoid unnecessary interest charges, late payment penalties and potential cashflow stress.

Why Is This Payment Important?

The standard uplift method calculates provisional tax based on your 2025 residual income tax plus a 5% increase and if not filed, then based on 2024 residual income tax plus 10%. While this method provides a straightforward approach, it may not reflect your current trading results, especially if profits are down or your circumstances have changed.

Importantly, failing to make the required payment on time can result in use-of-money interest (currently 9.89%%) and penalties from Inland revenue. These costs can accumulate quickly if not addressed promptly.

Tax Pooling – A Flexible Alternative

If cashflow is tight, or you would prefer not to tie up funds just yet, tax pooling offers a practical and Inland Revenue approved alternative.
Tax pooling allows you to defer or spread your tax payment while still being treated as having paid on time. By working with an approved tax pooling intermediary, you can purchase tax dated 28 August and pay the funds at a later date, often at a lower rate than Inland Revenue’s use of money interest rate.

This option can be particularly valuable for businesses experiencing seasonal cashflow fluctuations or unexpected costs.

Key Tips Ahead of 28 August:

• Review your position – Does the uplift method reflect your expected income this year? If not, speak to your advisor at Andersen New Zealand about whether an estimate may be more appropriate
• Mark the date – Avoid a last-minute rush by planning now for the 28 August payment
• Consider tax pooling – If you're concerned about cashflow, tax pooling may be a smart way to maintain flexibility while avoiding Inland Revenue’s penalties
• Seek advice early – Do not wait until the due date. Now is the right time to review your tax position and payment options

Need assistance with your provisional tax or want to explore whether tax pooling is right for you? Please get in touch, Andersen New Zealand is here to help you navigate your obligations with confidence.