If your business has a 31 March balance date, January 2027 is a date to circle now. On 15 January, your second provisional tax instalment is due, and for many businesses a GST payment lands on the same day. It comes right after the Christmas shutdown, when income is often at its lowest.
We see it every year. A business has a good run through spring, then gets a shock in the new year. The money was never lost. It just was not set aside.
What is due, and when
For a business with a 31 March balance date, using the standard provisional tax method and two-monthly GST, the main dates are:
| Date | What is due |
|---|---|
| 15 January 2027 | Second provisional tax instalment, and GST for the period ended 30 November |
| 7 February 2027 | Terminal tax for the year ended 31 March 2026 (7 April 2027 for clients without extension of time) |
| 7 April 2027 | Terminal tax for the year ended 31 March 2026 (7 April 2027 for clients with extension of time) |
| 7 May 2027 | Third provisional tax instalment, and GST for the period ended 31 March |
Your dates may differ if you have a different balance date, file GST six-monthly or use another provisional tax method. If you are unsure, ask us.
Why it catches people out
There are three common reasons.
- Timing. Tax is due on set dates, but customers pay when they pay. January income is usually slower, because many customers and staff are away.
- Provisional tax is based on the past. Under the standard method, your instalments are based on last year’s tax. If your profit has grown, you may be underpaying and face a larger bill at year-end. If it has dropped, you could be paying more than you need to.
- Several bills at once. Provisional tax, GST, PAYE and the usual January costs all fall within a few weeks.
Do you know which provisional tax method you are on?
There are four main options, and the right one depends on how steady your income is.
- Standard: three instalments based on last year’s tax. Predictable, but not always accurate.
- Estimation: you estimate this year’s tax. Flexible, but an estimate that is too low can lead to interest and penalties.
- Ratio: a percentage of your GST sales is paid with each GST return. It can suit GST-registered businesses with uneven income.
- AIM: payments are based on your actual profit so far, through approved accounting software.
It is worth checking before each instalment whether your method still fits. Paying the amount on the notice without checking can cost you cash you need, or leave a gap that has to be paid later.
Five things to do before 15 January
- Put the dates in your calendar and set a reminder two weeks ahead.
- Set up a tax account. Move a set percentage of income into a separate account each week or month, so the money is there when the bill arrives.
- Check your position. Look at this year’s profit so far. Is it higher or lower than last year’s?
- Chase overdue invoices now, not in the new year. Money owed to you in November can pay your January tax.
- Talk to us early. If cash is going to be tight, we can look at your provisional tax method, tax pooling and your options, before the due date, not after.
Tax pooling is worth asking about. It lets you pay provisional tax through an intermediary and manage the timing, which can reduce interest and penalties. We use Tax Traders for our clients.
Want a second pair of eyes?
We offer a cashflow and profit check-in before the 15 January instalment for $850+gst. We will look at your income, your tax position and your 2027 forecast and give you an indication of tax options. Get in touch on 0800 2 ENGINE (0800 236 446) or at info@engineroomca.co.nz.
This article provides general information only and is not personalised tax advice. Dates apply to a 31 March balance date and may differ for your business.
