The new buzzword brought to you by the IRD…
From 1 April, there is a new method of calculating and paying provisional tax called AIM (Accounting Income Method). The IRD have been running an extensive campaign to promote this new method and the perceived benefits that it is meant to bring. Their campaign includes contacting you direct to arrange a visit to explain.
You need to know that this method is optional and in theory the provisional tax is calculated on your “accounting income” from approved accounting software and paid at the same time as your provisional tax. So up to this point it all sounds so simple but, anything with tax is not simple, the IRD require a number of adjustments to be made to achieve an acceptable income figure to base the provisional tax payment on. These required adjustments add considerable complexity to the method which makes it unsuitable for a majority of our clients and therefore we recommend that the method NOT be adopted.
If you are thinking of taking up this option of using this method, or would like to discuss, please contact us before doing anything more.