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Use of Money Interest and provisional tax 20 Feb 2019

Provided you pay provisional tax on what is called the standard basis (based on 5% increase over last year) there is no liability for Use of Money Interest for the first and second provisional tax instalments.

However, any short-paid tax, when the figure has been worked out based on your profit for the year, is subject to Use of Money Interest at 8.22% running from 7 May 2019 for 31 March balance dates.

Inland Revenue says you should have a reasonable idea of your taxable income for the year ending 31 March 2019 by 7 May 2019. Therefore, you could adjust your tax payment at 7 May.

If you think you might have underpaid your tax, we suggest you top up your 7 May payment to allow for this. If you overpay, you will get a refund and a tiny amount of interest.

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