If what you have paid in provisional tax through the year exceeds
the tax owing at the end of the year, you have overpaid your tax.
The excess will be refunded to you (unless you have other debts with
Inland Revenue or you would like Inland Revenue to use it to pay
another liability).
If the provisional tax payments you have made are not enough to
cover your tax owing, the balance is called "terminal tax" and you
must pay it by the terminal tax due date.
When you need to pay terminal tax is based on two things:
- your balance date and
- whether you file your returns yourself or use a tax agent (eg
external accountant) who has an extension of time arrangement
with Inland Revenue to file your returns.
Most people have the standard balance
date of 31 March. If you have the standard balance date, your
terminal tax is due by:
- the first 7 February after balance date if your return is
not prepared or filed by a tax agent with an extension of time
to file your return, or
- the second 7 April after balance date if your return is
prepared or filed by a tax agent with an extension of time to
file your return.
The goal is to get your provisional tax to cover your income tax
so you aren't faced with a big terminal tax bill at the end of the
year.
Contact us to discuss how best this can be done.
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