From the 2020 tax year onwards, provisional tax customers using the standard option no longer need to switch to the estimation option to pay a lower amount at their final instalment date if they meet all of the following criteria:
- they expect to have a residual income tax (RIT) less than what was assessed using the standard option
- their RIT will still be more than $60,000
- they have paid all previous provisional tax instalments for the year.
If you have any clients with an expected RIT less than what was assessed for the year and choose to pay a lower amount, please send us a message in myIR so we can update their account. This will stop our system from sending letters requesting repayment and credits being transferred to the final provisional tax instalment incorrectly.
Information about this change is in the Tax Information Bulletin, Volume 32, Number 4, May 2020 (starting on page 53).