Before you pay your Provisional Tax…
May 1, 2025
The third provisional tax (P3) payment is due on Wednesday 7 May for businesses with a 31 March balance date. But with rising costs and changing trading conditions, many businesses are feeling the pinch.
If your cashflow is under pressure, or your profit is down on last year, it’s worth taking a moment before you hit “pay.” There may be smarter, more flexible options available to you.
1. Don’t Just Pay Based on Last Year
Your P3 payment is usually calculated off last year’s income — but if things have changed this year, you might not owe as much. If your profit is lower than expected, you may be able to re-estimate your tax to avoid overpaying now and waiting for a refund later.
Our advice: Talk to your accountant before making your P3 payment. A quick review could make a big difference to your cash position.
2. Tight Cashflow? Tax Pooling Can Help
If paying P3 in full isn’t realistic right now, tax pooling could be a great solution. It allows you to delay or spread your tax payments without triggering IRD penalties or interest.
Why clients use tax pooling:
- It buys you time when cashflow is tight
- It’s cheaper than IRD’s interest rates
- It keeps things tidy with IRD
We work with trusted tax pooling providers and can help you get this set up quickly if it’s the right fit.
3. Don’t Ignore the Due Date
Missing a payment without a plan in place can lead to unnecessary penalties and stress. Whether it’s a re-estimate, tax pooling, or setting up a payment arrangement, we can help you navigate the right path. Talk to us now to ensure you have options.
If you’re not sure whether to pay P3 — or how you’ll afford it — get in touch. We’ll help you understand your tax position, protect your cashflow, and make a plan that works for your business.
Talk to our team today – we’re here to help.
