IRD is reinventing the wheel – the new AIM method for paying provisional tax

Posted on 20 February 2018 by Annè Lensink

2 minutes to read

Most business owners are provisional tax payers, meaning that you pay PROVISIONAL tax during the financial year in August, January in May. Thereafter, IF your business performed better than last year and you made a whole lot more money, you pay TERMINAL tax the following year in April. Alternatively, you get a refund.

Now IRD is always trying to find ways to get their tax money sooner.

The latest development is the AIM method, to be rolled out in April. The AIM method is not compulsory but could be beneficial for some businesses.

In very simple terms, The AIM method, which stands for Accounting Income Method, works similarly to your GST returns. You calculate and pay your tax on a monthly or 2-monthly basis. As simple as this sounds, you must prepare calculations to ensure you are not overpaying, for example your depreciation, private use, debtors and creditors and trading stock calculations to name a few.

Don’t get me wrong, I am all for better and simpler ways of doing business. And if the AIM Method proves to work I will be recommending it to some of my clients who it would be suited to. At this point, not all Accounting Software Packages have the AIM functionality. However, I am sure this will be rolled out over the next months.

Please contact Annè if you would like to know if your business is suitable to use the AIM method and more importantly if it is beneficial for your business.

Lily Grau

“Annè is the only accountant I have come across who would always go out of her way to ensure all our business needs are met. Annè has enabled me to confidently run my accounts through Xero, and is only a phone call away when I need support. Having all my financial information at my fingertips has been key to our business’ success. Annè is a key member of my team and I wouldn’t want it any other way.”
— Lily Grau, Amici Limited

Nikki Clarke

“Working with Annè has been an absolute game changer. Not only do we get her accounting expertise but what she offers in regards to business planning, strategy and advice is invaluable. Whatever we throw at her she takes on with confidence and we feel that we can really trust her and are in good hands with our business.”
— Nikki Clarke, Cadenshae Limited

Miranda Harrison

“We love working with Annè. Her personable and professional approach plus her way to really take interest and be part of our team makes her the best accountant we have ever had. Yes she does our accounts- but that's not only half of what she does for us. We find the coaching advice and strategic thinking that Annè does enables us to continue to strive for success and never become complacent. It seems that our goals are her goals- and she puts everything into that.”
— Miranda Harrison, Activ8 NZ Limited

Helen & Glenn Fulton

“Anne challenges you to think outside the box, to grow your business, understand the figures. Seeing Anne really gives you that boost of confidence and motivation to keep going especially in times when you feel it’s a struggle. We love the format of her sessions, the goal setting and 90 day action plans and it is great to have someone outside of your business to be accountable to.”
— Helen & Glenn Fulton, GoFox Electrical Whangarei

Kyle & Jo Kake

“Running a small business has a lot of challenges and since meeting Annè we have been able to manage our business more efficiently with one-on-one training using Workflow Max and Xero Accounting software. Annè is there every step of the way providing guidance and advice when needed. She is genuinely interested in the success of our business and her ongoing support has been invaluable. We would not hesitate to recommend her to anyone!”
— Kyle & Jo Kake, Mason Street Architectural Drafting Ltd

Ben Morgan

“The quality of service I receive from Annè at Villa is second to none. She is so personable and professional and has made dealing with my accounts 100% stress free. Thank you Annè.”
— Ben Morgan, Ben Morgan Osteopathy