Managing the finances of a small business is hard work. So if you've ever felt the pain of paying lump sum taxes in advance, we have good news. AIM landed on 1 April 2018. It's pay-as-you-go for small business. It will make provisional tax payments easier on the cash flow of your small business.
How does it do that? Simple. If you choose AIM (Accounting Income Method), you make provisional tax payments throughout the year, just as you pay your GST. Because you're paying as you go, your tax is calculated from the profit made in the year so far - and because you're spreading the provisional tax out, there's no lump sum to prepare.
No more guessing games - or waiting around to file for refunds. You pay tax on your profits as you earn them, and only when you earn them. Refunds on overpayments happen during the year, because payments happen during the year. This means you can enjoy greater clarity around your financial targets, because you know how much tax needs to be paid, and when you need to pay it.
AIM benefits new companies, growing companies, and companies with uncertain incomes. It also benefits those who simply want to keep on top of their tax throughout the year, instead of budgeting for a lump sum payment.
If you're interested in AIM, give us a call so we can discuss whether AIM is the best provisional tax option for your business. There are two opt-in deadlines: May 28 for making monthly AIM payments, and June 28 for making two-monthly AIM payments. This means you have plenty of time to get in touch with us.
To learn more about AIM and who it's for, visit our dedicated webpage or view our quick fact sheet.