There are some days of the year that are just awful. Specifically, I’m referring to the 28 August, the 15 January and the 7 May. Yes, that’s the day those of us in business have to pay our GST and Provisional Tax, a depressing day indeed. Just why the IRD thought that making us pay both taxes on the same day was a good idea is a total mystery!
However, there’s one thing worse than paying the GST and Provisional Tax and that’s not paying. Why’s that I hear you ask? Because if you don’t pay, the tax doesn’t go away, it just gets worse! Not only does the amount you owe grow exponentially as the IRD pile on interest and penalties but it’s not long before the next GST bill looms and after that the next Provisional Tax bill and so on.
It then becomes extremely difficult to catch up and before long it spirals out of control, with the level of debt rising to unassailable levels which just becomes impossible to clear, like a number of my clients who owe anything from $15,000 up to and over $100,000! Even the IRD give up at that level and instead start hassling me (why they hassle me I just don’t know - it’s not like I owe the tax!) about clients who owe $150! That’s a much more comfortable level of debt which they can actually collect!
So if you care about your future and value your financial livelihood I urge you not to join my clients who owe many thousands of dollars to the IRD. If you don’t know, find out how much tax you’re going to have to pay and start saving. Ask your accountant to estimate your annual tax bill, divide it by 12, 26 or 52 (depending on your preference) and set up an AP to a savings account. It may be much more fun spending your tax money and blaming your accountant but rest assured, you are the only person that’s going to suffer in the long run!
If you need help with your tax situation call Nick today on 021 225 6425 or email.