From April 2018 small businesses that have turnover of less than $5 million a year can work out their provisional tax using the accounting income method (AIM).
AIM uses new functionality included in approved accounting software to work out payments. You can continue to use another provisional tax option if you think your business won't suit AIM. It will suit your business if:
your business is growing
you're new to business
you have irregular or seasonal income
it's hard to forecast your income accurately
you have an approved accounting software or want to start using an approved accounting software.
Once you've opted in to AIM you'll only pay provisional tax when your business makes a profit. This will help you to avoid cash flow problems.
As long as you make your payments in full and on time, there is no exposure to use-of-money interest. If your business makes a loss you can get your refund straightaway rather than waiting until the end of the year. If you think this would suit you, please get in touch with our knowledgeable staff here at the office to discuss further.
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