Is the new Accounting Income Method (AIM) right for you?

Want an easier way to stay on top of tax? AIM is an Inland Revenue initiative to help small businesses pay tax in real time helping cash flow and avoiding late penalties. See if it’s right for you.

A new way to stay on top of your tax

Many small businesses struggle with cash flow. This isn’t surprising, as the traditional provisional tax method can be tough. AIM is an initiative from Inland Revenue to help provisional taxpayers work in real time. Rather than ‘guessing’ the amount based on last year’s profit and loss, business owners can pay tax based on their most recent GST period by filing an AIM "return" every two months. This means there’s less chance of over- or under-paying and falling into the interest system.

See if AIM is right for your small business

Four ways to pay

You can now manage provisional tax in four ways:

  • The traditional standard uplift, where three payments are made each year based on your tax bill in the year previous plus 5%.
  • The GST ratio method, where provisional tax is calculated based on your GST supplies and is all paid along with your GST.
  • The estimate method, based on an estimate of likely earnings for the year.
  • AIM, the Inland Revenue’s new way to pay. 

Find out which one best suits your small business

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Things to know about AIM

  • Pay provisional tax ‘as you go’ – only pay tax when you make a profit.
  • Companies and sole traders under $5m turnover can use AIM.
  • No use-of-money interest or penalties on prov tax for AIM users.
  • No tax pooling available for AIM users during the year.
  • AIM is not compulsory.
  • AIM is in line with GST filing.

Download the IRD fact sheet for more information.

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Get your clients started with AIM

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AIM is available in Xero Tax

AIM is only available in Xero Tax as part of Practice Manager. If you’re a Partner, set up a tax agent so you can file AIM returns on behalf of your clients.

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AIM opt in

Your client’s first AIM return should be filed and paid by 28 June 2018 in order to opt-in for the 2019 tax year. Once in your clients can’t opt out for that tax year.

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Want to know more?

Find out exactly how you can prepare, file and report on AIM returns for your clients with this Xero webinar.

Read more about AIM on the IRD site

Visit IRD

Simplifying provisional tax with AIM and Xero tax

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