IRD to no longer accept Cheques
The days of being able to pay your tax bill with a post-dated cheque are coming to an end. The Inland Revenue Department will no longer accept payments by cheque from customers (who are able to use alternative payment options) from the 1st of March onwards.
With the rapid growth of internet banking only 5% of payments received by Inland Revenue Department nowadays are by cheque. There are several alternative ways for people to pay their tax (including PAYE and GST) and these are as follows:
- Internet banking. Payment this way minimises delays and includes a formal notification of the date and time the payment was made to Inland Revenue Department.
- Taxpayers can make payment by debit/credit card over the phone, through the unauthenticated payment page on the Inland Revenue website, and through MyIR.
- Taxpayers can set up direct debits in MyIR.
- Cash and eftpos are still payment options, but only at Westpac branches. These types of payment are not accepted at Inland Revenue Department offices.
- Further alternative options could be by using a tax intermediary or authorising a third-party payer such as your accountant or office manager. When another person is authorised on your account, your Bank will need to go through the usual process which includes anti money laundering checks to add approved signatories.
- The final option is to get approval from Inland Revenue Department where there are exceptional circumstances, to continue paying by cheque. This may apply where taxpayers do not have access to the internet, although it is likely other options will still be available to these people.
Electronic payments are the way of the future. Compared with this process, cheques are expensive to process, and the technology used to process them, both by Inland Revenue and the Banks, is approaching the end of its working life. In countries such as Germany all Inland Revenue Department matters are done electronically, and New Zealand is following suit.
If you are in doubt about how you should pay your tax you should contact the Inland Revenue Department, your Bank or your accountant.
IRD Website Causing Frustration
The new look IRD website (in operation since April last year) has been catching many people out and causing taxpayers to worry that they have overdue tax. The problem is caused as the website (where you can log in with a MyIR account) shows amounts owed (but not yet due) in large red text. Often the tax is not due until a later date so there is no need for alarm, but IRD obviously don’t want people to forget about their obligations. Our advice to people who are self employed or have tax to pay for whatever reason is to write the amount in a diary or calendar once they know the amount and date it is due – then there should be no surprises later on!