IRD into Stage Two of Business Transformation
The IRD has been working hard to be easier to do business with. It’s new tax system is currently kicking in, giving you new and simpler ways to manager your GST obligations through myIR.
Enhancements include the traceability of GST transfers and Notifications and Alerts sent when there is something for you to do in your myIR account.
From April, IRD will address more areas including:
However, the biggest change will be to income tax law. AIM (Accounting Income Method), a new option for calculating provisional tax, allows payments to be based on your actual profit in that period – so if you don’t make a profit, you won’t pay provisional tax. This option is only available to clients on integrated and approved cloud-based accounting packages, with clients having the option of filing and paying at the same time that their GST returns are filed. Should you wish to find out more about this option, please contact one of our team to discuss whether this option or another provisional tax payment option may be appropriate.
In April 2018, the IRD will also introduce payday reporting of PAYE information – that is, employers will need to report employee payments to the IRD every pay run. To give you time to put systems in place, businesses will have a year before it becomes mandatory.
The introduction of payday reporting will make the payroll process more onerous for employers, from current monthly filing to every payday filing. This therefore creates more urgency around getting your payroll processes automated. Anticipating this change, software providers such as MYOB and Xero have improved their payroll system offerings so that the time involved in paying employees, paying the IRD and filing your returns is significantly reduced. Please contact us should you wish to discuss which payroll option may be best suited to your business if you are not already on a cloud-based solution.
Income Tax Returns about to get easier
Hand in hand with payday reporting, the IRD will also begin collecting PAYE information for the 2018/19 year to allow pre-population of income tax returns. This should make life a bit easier for SMEs. What’s more, the release of Working for Families is being brought forward to 2019, to coincide with tax returns being done under the new system, which again will make things simpler for SMEs.