The 30th of June will be the date the final 2024/25 provisional tax instalment is due for May Balance date farming clients.
The lift in milk payout from the 2024 season will see many of you making significantly more profit than the prior year. When including the Fonterra dividend the increase in milk income will be $1.86 per kg of milksolids. The dry conditions will have added to costs and possibly had an impact on production but will unlikely have eroded all the additional milk income.
There is exposure to a use of money interest cost, currently running at 9.89%, when your Residual Income Tax is greater than $60,000. To reduce that interest exposure you may want to top up the June provisional tax payment.
For many of you we will have communicated directly this month already to estimate the additional tax cost. If we have not been in contact and you feel like your instalment amount needs to be reviewed, please contact your client manager as soon as possible.