Friday, 13 June 2014

Provisional tax changes good news for small business

I'm very pleased to see Revenue Minister Todd McClay stating that the provisional tax system was not "fit for purpose". Provisional tax is a nightmare for small business, a problem I've come across myself. Todd has proposed an overhaul of the system, something many will be welcoming.

When you're running on a very limited cash flow or are depending on one customer to pay up, it can be quite stressful - as well as the pain of trying to forecast what tax you should pay for a coming period. The overhead isn't exactly productive use of your time.

A simpler pay-as-you-go regime, while potentially creating more administration work, would be easier to manage from a cashflow perspective.

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