Editorial: Sensible move
OPINION: The Government's decision to rule out changes to Fringe Benefit Tax (FBT) that would cost every farmer thousands of dollars annually, is sensible.
The company says its new product Tax Shield allows a taxpayer to pay an upfront fee to cover the portion of their income that is fluctuating.
Fluctuating income can result in tax is underpaid and in late payment penalties of up to 20% per annum and UOMI of 8.4%, chief executive Chris Cunniffe explains.
But Tax Shield ensures that in the event a taxpayer earns the extra income, and so has a higher tax bill, any late payment penalties and UOMI incurred up to the amount of tax covered will be eliminated when they pay the principal and an exercise fee.
“We have developed this to remove the anxiety of late payment penalties and UOMI.”
The amount of tax set aside for taxpayers is ‘date-stamped’ and held in an IRD account administered by the Guardian Trust, says Cunniffe.
Late payment penalties and UOMI are eliminated because the IRD treats the tax as being paid on time when it is transferred to an individual taxpayer’s IRD account.
Cunniffe says it is ideal for taxpayers whose income is difficult to predict and are concerned about exposure to IRD late payment penalties and UOMI of up to 28%.
Taxpayers can secure cover at their next provisional tax date until February 7, 2016.
