An Oamaru accountant is an enthusiastic advocate of Inland Revenue’s new provisional tax option, the Accounting Income Method (AIM).
Adair Craik has more than 50 clients signed up for AIM, which requires small businesses to make provisional tax payments only when they’re making a profit.
“I’m a keen supporter,” she says. “I’ve got retailers, manufacturers, panel beaters, moteliers, professional athletes and a hot rod restorer all using AIM and it’s proving to be a real advantage for them.
“My clients always know where they stand and can make better decisions about how to manage their money rather than having to estimate how much to keep aside to cover the provisional tax bill. AIM takes away that element of surprise and my clients like that.”
AIM is currently provided through three accounting software providers as part of their package. This means provisional tax calculations can be made using real-time financial information.
“It’s great for instilling financial discipline and it’s helping my clients stay on top of their debts and have a better view of their cashflow,” says Adair Craik.
Her client Marty Winders, the hot rod restorer, agrees. “(AIM) has freed up our working capital so we know our cashflow is our cashflow. It just takes the sting out of it.
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“AIM has been a huge reliever of stress for me. I have a bit more freedom – the freedom to focus on the things that I really love doing. I can’t believe that everyone’s not doing it.”
Richard Owen, the small business segment leader at Inland Revenue says the experience of Adair Craik and Marty Winders in Oamaru will be familiar to small businesses elsewhere in the country.
“More businesses are opting to take the guesswork out of provisional tax in favour of the greater certainty that AIM provides.
“That’s particularly useful when a business is growing fast and needs to know where they stand.
“We recommend any business finding they don’t have the cash to meet their provisional tax obligations should talk with their tax professional about whether AIM can make life easier,” says Richard Owen.
Find out whether AIM will suit your business at www.ird.govt.nz/AIM.