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Provisional tax notices

The fields in the provisional basis section of the tax notice change depending on the provisional tax option being used. This is determined by the provisional tax option that was selected in the client's tax notice settings before the tax notice was created.

If you weren't able to make changes to the provisional tax option for the current period before the tax notice was created, don't worry, you can make changes within the tax notice.

Provisional basis

Select the Estimation or Standard method to calculate provisional tax for your client.

Tax notices currently don't support the AIM or ratio method. If your client's on one of these methods, select Standard in the tax notice and select AIM or ratio in the tax return.


If you're using the Estimation method to calculate your client's provisional tax liability, you can enter their Estimated 20xx taxable income for the year and we'll calculate their Tax on taxable income and Estimated 20xx provisional tax amount. Enter the Other debits (individual entity types only) and Estimated tax credits, and the amount is automatically adjusted. Other debits (individual entity types only) is where you enter data about portfolio investment entity (PIE) debit and non-resident withholding tax debit.

Animation showing how entering an amount in the Estimated 2022 taxable income field and Estimated tax credits fields automatically updates values in the other fields


If you're using the Standard method and the return is approved or later, we automatically select the last tax year as the basis year.

If there's no assessed, filed or approved tax return for last year, but there is one for the year before last, we’ll use the year before last as the basis year.

If there’s no assessed, filed or approved tax return for last year and for the year before last, we’ll use the year before last’s return as the basis year, which will have a Not Started or Draft status.

You can, however, change the basis year back to the last financial year. If there's no tax return data for the selected basis year, the tax notice will be pre-filled using Inland Revenue assessment data, if available.

The basis value displays the status of the tax return that's used as the basis for the tax notice. That status will be Not StartedDraftApprovedFiled or Assessed.

Draft could be In progress, In review or Ready for client.

Approved could be Pending client signature, Ready to file or Rejected.

If none of the above data is available, you can enter the other debits (individual entity types only), taxable income, tax credits fields, and we'll automatically calculate the Tax on taxable income and Residual income taxOther debits (individual entity types only) is where you enter data about portfolio investment entity (PIE) debit and non-resident withholding tax debit.

If you've changed the Provisional tax option in a tax notice, you'll need click Sync tax return data in the tax return to see the updated method.

Payable amount

The payable amount shows how the provisional tax instalment amount is calculated.

It adds the uplift from the basis year to arrive at the total provisional tax amount for the year, before adding any payments and transfers made to Inland Revenue up until the instalment's due date. This helps you offset any underpayments or overpayments from previous instalments.

It's important that you check that amounts of any in-progress tax notices are correct before sending the notices for approval.

As you progress through the compliance workflow, changes in status can trigger changes in amounts that may require a review of voluntary adjustments.

Expected payments appear in Data reconciliation when the return is filed or when a transaction has been manually added in Data reconciliation. This means that for tax notices that aren't yet approved:

  • Tick

    you might need to manually add voluntary adjustments if the tax notice is going to be sent before the tax return, or

  • Tick

    when the tax return is sent to the client, you may need to remove voluntary adjustments from the tax notice.

When a tax return assessment is reconciled in Data reconciliation, you’ll see an alert on the Tax notices page about tax return data being available. If you see this message, you can click to open and review the details and decide if you want to recalculate the tax notice amounts using the new data. You do this by clicking Send for rework on the tax notice to change the status back to in-progress, which updates the tax notice amounts. If you change the tax notice to in-progress, you can then edit or remove the voluntary adjustments as needed.

To remove voluntary adjustments to fix any affected tax notices, filter the Tax notices list by voluntary adjustments, open the tax notice and click remove to the right of the Voluntary adjustment section in the tax notice. See below for detailed steps.

Learn more about how transactions work in the Tax notices workflow and the Data reconciliation workflow.

Tax pooling

Tax pooling is only available to taxpayers using the Standard or Estimation options to calculate provisional tax.

Voluntary adjustments

You have up to 5 voluntary adjustments for individual entities, and up to 3 for all other entity types.

If you want your client to pay less tax than the instalment amount, you can make a negative voluntary adjustment by selecting the tax type INC or FAM.