The final phase of Inland Revenue’s Business Transformation programme will go live on 28 October. This includes improvements to myIR, as well as other changes for businesses and employers.
Whilst some changes to the background processes will not require any alterations within your business, there are some aspects to be aware of that could affect your tax position.
- Compulsory employer deductions for Child Support:
It will be compulsory for employers to deduct child support payments from newly liable (paying) parents’ salaries or wages. If you have an employee who becomes liable for child support payments, IRD will contact you to make these deductions on their behalf. The notices will now be electronic instead of paper
- Changes to Payroll relationships:
If you haven’t included an employee in your Employment Information and they have no cease date, or if they continually show as having nil earnings, the relationship will be ceased after 3 months.
If the ceased employee is still employed but inactive (i.e. a seasonal worker or someone on extended ACC), you can update the automated cease date to the correct, future date, if known. You need to do this within 30 days of the employment cease date for the employee to remain active.
If the ceased employee appears in your Employment Information again 30 days or more after the cease date, the employee will be treated as a rehired employee and a new employee/employer relationship will be created. There may be some implications for KiwiSaver, particularly for those who have previously opted out and wish to remain that way. Check with your accountant.
- IRD numbers and bankruptcy:
Currently when a customer is made bankrupt their existing IRD number is ceased and they are issued a new one, resulting in bankrupt customers having multiple IRD numbers. Following the changes, bankruptcy will no longer result in a new IRD number and customers will instead be able to continue using their existing IRD number.
- If you file your own Payroll:
When completing Employment Information (EI) files as part of your payroll process, you’ll be able to enter a negative value in the ‘prior period gross/PAYE adjustment’ fields to adjust for prior periods. You’ll only be able to do this if certain validations are met e.g., the negative amount can only be equal to or less than the amount being reported on the line – so if an employee has $500 gross salary and wages on the line, the maximum the corresponding negative amount can be is -$500.
To make these upgrades, MYIR online services, Gateway Services and IRD phone lines will be closed from 3pm Thursday 21 October until the morning of Thursday 28 October.
If you have a direct debit or automatic payment set up with your bank to process whilst they’re shut down, this will be processed on the 28 October.
All draft returns and secure mail will be deleted during the upgrade. If you have saved any drafts in myIR, make sure you finish them before 3pm on Thursday 21 October, so you don’t lose them.
You have until 4 November to file and pay GST and provisional tax, if you’d like to file prior to the upgrade, you can do so prior to 21 October.
Despite this small extension, if you or your business are suffering from the effects of the extended Covid Lockdowns, you may not be able to cover your upcoming tax bills. We can help.
If you think you might need further assistance, Contact Us to receive professional and qualified advice on tax, IRD arrears and other matters, today.