Blog

UOMI is such a monster we make no apologies for repeating advice we have given in an earlier newsletter.

 

We meet many of you just once a year. By now you should have a fair idea of how well you have done for the year.

 

If we see you so infrequently, we cannot monitor your income and potential tax liability. In most cases this does not matter. However, if your business is a company which does not distribute all the profit to shareholders, or you have a trust, be careful. If you anticipate either of them is going to have a much bigger profit than in the previous year, you should check your tax situation.

 

You may be exposed to the Use of Money Interest penalty for success.

 

Unless your business is short of funds, it is better to pay some more tax now than to wait until we see you later in the year. The current interest rate is 8.89% and it may have been accumulating, on a small scale, since you paid your first provisional tax payment for the year. For March balance dates this is 28 August 2011.

 

UOMI also applies to individuals whose income generates $50,000 or more annual tax to pay. For most people this cuts in at a taxable income of $179,030.