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Inland Revenue Moving on from Cheques - Sep 2019

Cheque usage continues to decline every year. Last year cheques only accounted for 5% of payments to Inland Revenue and some people who used cheques also used other payment methods.

From 1 March 2020, Inland Revenue will no longer be accepting cheques if customers have an alternative payment option available. This includes post-dated cheques (cheques dated after 1 March 2020).

Around 90% of the cheques we receive come from clients of tax agents. If you or your clients use cheques you will be instrumental in the transition to alternative payment methods. There’s plenty of time before next March for people to explore their options and find a convenient and secure way that works for them.

There are many different ways to pay – electronically or in person.

Ways to pay

Here’s a summary of payment options:

  • myIR: You can pay by direct debit and make debit card and credit card payments securely through myIR online services. Visit our website (ird.govt.nz) and login or register for myIR.
  • Online banking: You may be able to make payments using online banking. Contact your bank for more information.
  • Credit or debit card via our website: Use your credit or debit card to make online payments through our website. Visit ird.govt.nz/pay.
  • In person at Westpac: Pay by EFTPOS or cash at a Westpac branch or Smart ATM.
  • Money transfer: If you are overseas you can pay us using a money transfer service. Search for “make a payment” on our website for more information.

Charges may apply for some payment options.

Inland Revenue are soon going to start contacting cheque payers (and their tax agents) to let them know about this change and alternative ways to pay.

In the meantime, if you would like more information visit our website at ird.govt.nz/pay.

Taxing Times Ahead for Farmers - August 2018

Taxing Times Ahead for Farmers

July through to December is the main reporting time for both dairy and drystock farmers who usually have a May or June balance date. Profitability has certainly been up over the last couple of years, helped by an increased Fonterra payout, along with excellent returns for both sheep and cattle.

In our office we have completed a number of 2018 financial accounts for both dairy and dry stock clients and it is noticeable that profits have been very good. In addition to increased gross income through higher commodity prices, farmers in general have worked very hard to reduce their costs and are farming in a more sustainable and prudent way. Interest rates remain at very low levels and generally the past couple of seasons have been pretty good from a climatic point of view.

Livestock Valuation Options

With profit comes tax. Although it can be looked at as a problem, it is certainly a good problem to have. In the King Country farmers are fortunate to have the option of a number of excellent rural accountants that specialise in the farming sector. In our office we are looking carefully at how livestock are valued in the financial accounts as this can have a considerable impact on tax. Generally for beef and sheep farmers we will not be adding any livestock to the Herd Scheme this year, as these are at historically high levels. Dairy cattle values, however, are low for the 2018 financial year and it may be an opportune time to utilise the herd scheme, although this will add to a farmer’s income and cause even greater tax problems in the short term. However, once livestock is on the herd scheme, it can save that farmer a lot of tax when they eventually sell their livestock in the future, as the increase in value over time will be tax free. It is certainly worth going through the exercise.

Increased ‘safe harbour’ threshold – a positive change

The change that came into effect from the 2018 tax year onwards, that has helped farming businesses from a tax perspective, is the lifting of the safe harbour threshold from $2,500 to $60,000 for trusts, companies and individuals. In the past accountants would generally be scrambling to keep a client’s tax to a lower level, to avoid use of money interest that is imposed by the Inland Revenue Department for underestimating the provisional tax that has been paid. The new system is a lot easier to work with, it avoids a lot of profit estimating which costs time and money and so is overall much fairer for farming families and small businesses.

Option to delay filing dates with IRD

With the lift in incomes for the 2018 year, most farmers would not have paid sufficient provisional tax. This will generally mean terminal tax to pay in April next year and increased provisional tax for the current year. Accountants do (in most cases) have the option of not filing tax returns with the Inland Revenue Department until later in the year (perhaps after the second provisional tax instalment date) and this can help with cashflow as effectively it means deferring the bulk of the provisional tax to a later date, when funds are available. In the meantime, provisional tax is paid at a lower level, based on the previous year’s profit.

Tax is one of life’s certainties, unfortunately high commodity prices and low interest rates are not. As always good communication with your accountant is essential.

Tax Rates (As at April 2018)

Tax Rates (As at April 2018)

Individuals

  • 0 – 14,000                                            10.5%
  • 14,001 – 48,000                                  17.5%
  • 48,001 – 70,000                                   30%
  • 70,001 +                                               33%

Trusts

  • Flat tax rate                                            33%

Companies

  • Flat tax rate                                            28%
  • DWT (Dividend Withholding Tax)           5%

Alert - Scam Email! 9 May 2018

We have been made aware that there is a scam email being sent out to people. If you have received an email regarding a refund from Inland Revenue please contact us to confirm this is correct. The scam email will state the following;

 

From:  "This email address is being protected from spambots. You need JavaScript enabled to view it." <This email address is being protected from spambots. You need JavaScript enabled to view it.;

Date:    Monday, 7 May 2018 1:19 AM

Subject: A message from Inland Revenue. DO NOT REPLY

 

Dear Customer,

You still have a $____ tax return for period 2016/17 ending due 9 May 2018, now available for refund.Please submit the tax refund request and allow us 1-3 business days in order to process it.

Complete your details at https:((services.ird.qovt.nz/irsso/loain.aspx to receive your refund online.

Note*

Make sure all your income, benefits and family details are up to date in mylR, this will help make sure you're getting the right entitlements. This email is NOT a SPAM/BULK and has been sent as you have registered your email address with Inland Revenue.

Please do not reply to this email as this inbox is not monitored.lnland Revenue, 55 Featherston Street, Wellington, New Zealand.

By accepting this communication by electronic means you consent to accept future communications by electronic means for the purposes of section 16 of the Electronic Transactions Act.

Please do not reply to this email, the inbox is not monitored.

You can update your alert email settings in your mylR account at any time.

[AID:105BF801]

Alert - Scam Email! 15 March 2018

We have been made aware that there is a scam email being sent out to people. If you have received an email regarding a refund from Inland Revenue please contact us to confirm this is correct. The scam email will state the following;

 

IR3 individual income tax return 2016

   1 April 2016 to 31 May 2017

 

After the last calculations of your fiscal activity, we have determined that you are eligible to receive a tax refund of $Amount NZD ending due 28 February 2018. Please Click Refund Form to sumit your tax refund request.

Note: A refund can be delayed a variety of reasons, for example submitting invalid records or appying after deadline.

This email was sent to - your email address - for the ongoing support of your account. For security reasons you'll be automatically logged off after 15 minutes.

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