Tax pooling funds generally cannot be used to meet regular tax payments like GST. This is because the payment amount is known by the due date for these payments.
Funds may be used for PAYE only after:
- a reassessment has been made
- an adjustment results in increased obligation.
Tax pooling funds cannot be applied to any tax or associated use-of-money interest after:
- 60 days of a notification of reassessment or increased obligation to pay tax
- 75 days of a taxpayer’s end-of-year date for paying income
- 76 days for October, November and December balance-date customers if their end-of-year date falls within a tax year with 29 February.
These amounts can be applied at the date the transfer is requested.
Reassessments or increased obligations
After reassessments or increased obligations, pooling funds will only be available for the difference between the original and new amounts.
The same restriction applies to use-of-money interest on these deferrable amounts and to pay deferrable tax.
Agreed delay tax
Pooling funds may be used, with the Commissioner’s agreement, on tax referred to as ‘agreed delay tax’. This includes the use-of-money interest for the agreed delay tax.
This can happen when a taxpayer initiates a dispute under Part 4A of the TAA.