You’re in your first year of business and it’s time to look at your tax. You don’t have to pay your income tax until well after the financial year-end on 31 March.
But if you do pay before then — and you’re self-employed or in a partnership — you could be eligible for a 6.7 per cent discount. (If you use a company or a trust in the conduct of your business you are not eligible for this discount.)
You don’t have to pay the tax on your first year’s profits when you file your tax return at the end of your financial year. Your payment date may be months after you file your tax return.
But you can make voluntary tax payments in that first year to spread the cost. You might also qualify for this early payment discount of 6.7 per cent.
The discount may not sound like much, but it adds up quickly.
If you have not been making tax payments in your first year, you must pay the tax by 7 February the following year if you have the standard 31 March year-end date. If you have a tax agent, you must pay by 7 April of the following year.
Check out Inland Revenue's Early payment income tax discount page (external link) to see if you qualify.
Here's a taster of the tax-reducing tips from our visual guide: