Venkat Raman
Wellington, April 1, 2020
The New Zealand Inland Revenue Department has said that it will write-off any penalties and interest for businesses that are unable to pay taxes on time due to the impact of COVID-19.
“Don’t worry about contacting us right now. Get in touch with us when you can,” a notification said.
The Department said that its officials are working to provide essential services for business and individual customers. Payments, including Working for Families customers, will still be made.
“We would like employers to continue to file their returns as normal so that we can help to make correct payments to people. This would help IRD to work our the right amounts for people and helps the Government continue to respond to what is happening in the economy,” the notification said.
Contacting IRD during the lockdown
The frontline services of IRD have been closed, phone services are limited and hence the most effective way of accessing services or seeking information would be online (www.ird.govt.nz) through MyIR.
“IRD is still working on all critical matters related to tax entitlements and payment obligations. We know these are matters causing real stress and uncertainty and we are working urgently to provide as much certainty as quickly as we can. Please use our online services to contact us – preferably through your myIR account on our www.ird.govt.nz/covid-19
Ministry of Social Development (MSD) is responsible for the administration of the wage subsidy.
For more information, please contact www.workandincome.govt.nz/covid19support
Wage Subsidies
The Department has tax-related guidance for employers about the wage subsidies.
As Finance Minister Grant Robertson has emphasised, employers must pass on the wage subsidies to the employees for whom these have been disbursed and any breach will be treated as fraud.
All deductions (such as PAYE, KiwiSaver and child support) should be made as normal.
If the total wage (the subsidy plus the employer funded pay) amounts to the same wages as previously, the pay and deductions on their payslip should be the same.
Employers won’t be liable for income tax or GST on the subsidy received from MSD and will not be entitled to an income tax deduction for wages paid out of the wage subsidy.
Payment Options
The notification said that IRD would understand if a business is unable to pay its taxes on time due to the impact of Covid-19.
“Get in touch with us when you can and we will write-off any penalties and interest,” it said.
If a business can pay, there are several options – with internet banking or using myIR are the easiest.
Businesses can also make credit card or debit card payments over the phone or set up direct debit payments through their myIR account.
For further details on alternative ways to pay your tax see: https://www.ird.govt.nz/managing-my-tax/make-a-payment/ways-of-paying
Westpac Branches
Only some Westpac branches will be open one day a week, on a Wednesday, during the COVID-19 lockdown. Customers who can pay their tax bill at their local Westpac branch will be unable to do so until they can visit a branch on its open day.
https://www.westpac.co.nz/who-we-are/covid-19/branches-and-atms/
Instalment arrangements
IRD is enabling more flexibility and lowering the threshold for instalment arrangements set up in myIR. The new minimum repayment rates are: Weekly $20 (previously $50); Fortnightly $40 (previously $100); Monthly $80 (previously $200).
“We recognise this is a concerning time for tax agents and customers and we want to support you wherever we can through any current audits or disputes. We know that you are under a lot of pressure and uncertainty currently, and we want to work with you on a case by case basis. This may be by delaying the progress of an audit or dispute for a period,” the notification said.
IRD has decided to extend the timeframe for filing Basic Compliance Packages (BCPs). The new due date is June 30, 2020. Please forward questions on this to bcp@ird.govt.nz
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