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RC 10: Calculating amount of instalment under standard and estimation methods
or “How to work out your provisional tax instalments”
You could also call this:

“How to work out your provisional tax payments using AIM”

When you use the AIM method, you calculate how much provisional tax you need to pay on each instalment date for a tax year. You do this using a special accounting system that looks at your income over either a two-month or one-month period.

If you decide to switch to the AIM method during the tax year, you’ll use the same calculation for most of your remaining instalment dates. However, for the first instalment date after you switch, you’ll need to do a different calculation.

For this first instalment after switching, you need to work out how much tax you would have paid if you’d been using AIM from the start of the tax year. Then, you subtract the amount of provisional tax you’ve already paid using your old method. This gives you the amount you need to pay for that first instalment.

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Next up: RC 11: Calculating amount of instalment using GST ratio

or “How to work out your provisional tax using your GST ratio”
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Part R General collection rules
Provisional tax: Table R1: Summary of instalment dates and calculation methods for provisional tax

RC 10BCalculating amount of instalment for periods using AIM method

  1. For a person who uses the AIM method, the amount of provisional tax payable on an instalment date for a tax year is the amount calculated using an AIM-capable accounting system for the 2-monthly or monthly period given by schedule 3, part AB (Payment of provisional tax and terminal tax) for the applicable instalment date.

  2. For a person who chooses to change to the AIM method under section RC 5(5B)(a)(ii), the amount of provisional tax payable on a remaining instalment date for a tax year is given by subsection (1), except for the first remaining instalment date. Subsection (3) provides the calculation for the first remaining instalment date.

  3. For the purposes of subsection (2), the amount of provisional tax payable for the first remaining instalment date is the total amount, year to date including the firstRD remaining instalment date, that would have been payable if the person had used the AIM method from the beginning of the tax year, less the amount of provisional tax the person has paid, before the change, under the relevant non-AIM method for the tax year.

Notes
  • Section RC 10B: inserted, on , by section 39(1) (and see section 39(2) for application) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
  • Section RC 10B(1) heading: inserted, on , by section 250(1) (and see section 250(3) for application) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
  • Section RC 10B(2) heading: inserted, on , by section 250(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
  • Section RC 10B(2): inserted, on , by section 250(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
  • Section RC 10B(3) heading: inserted, on , by section 250(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
  • Section RC 10B(3): inserted, on , by section 250(2) of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).