Sort your tax, stay at the beach
For clients with a 31 March balance date, January can be the most challenging month as cash flow is often at its lowest. The second instalment of provisional tax along with GST payments are due 16th January (as the 15th is a Sunday) while PAYE is due 20th January.
For businesses struggling with cash flow, there are a number of tax pooling options available to cover your provisional or terminal tax payments. For a small upfront fee, tax payments can be deferred to a more convenient time, without incurring late payment penalties and limiting exposure to use of money interest.
For GST and PAYE, careful cash flow management is required here as tax pooling is not available to cover these obligations. A simple cash flow forecast will help project expected cash flows. If you find cash flows won’t be sufficient, simply chasing debtors prior to the Christmas break, or arranging later payments with January’s creditors can make a big difference.
If you see issues on the horizon, contact your BDO adviser for help.