IRD

Image: Flooded road

Cashflow relief for farmers impacted by flood or drought

Cashflow relief for farmers impacted by flood or drought 1200 630 Lee Stace

Those impacted by flooding in Canterbury or drought elsewhere in New Zealand have another option to manage their cashflow. It’s called tax pooling. It lets taxpayers defer their upcoming provisional tax payments to a time that suits them, without incurring interest (currently seven percent) and late payment penalties from Inland Revenue (IRD). The service –…

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Bright-line test: Don’t get caught by ‘change-of-use’ rule fishhook

Bright-line test: Don’t get caught by ‘change-of-use’ rule fishhook 1200 630 Lee Stace

Anyone who lives away from their main home for more than a year will be liable to pay income tax on any profit they make from the sale of a residential property sold within the new bright-line period. That’s because of the introduction of a ‘change-of-use’ rule that came into effect when the Government amended…

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Seller beware – IRD bright-line campaign update

Seller beware – IRD bright-line campaign update 1200 630 Lee Stace

Inland Revenue (IRD) will soon begin issuing letters to taxpayers within a month of them selling a residential property. These will be sent as soon as the tax department identifies a transaction that potentially falls within the bright-line rules, to ensure people are aware of any possible tax obligations. IRD says initially there will be…

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Can AIM taxpayers use tax pooling?

Can AIM taxpayers use tax pooling? 1200 630 Lee Stace

A taxpayer cannot use tax pooling to defer payment of, or settle, provisional tax instalments calculated under the accounting income method (AIM). However, Tax Management NZ (TMNZ) can help AIM taxpayers with terminal tax or when they receive a notice of reassessment. What does tax pooling legislation say about AIM? Legislation in the Income Tax…

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Make IRD interest, late payment penalties disappear

Make IRD interest, late payment penalties disappear 1024 683 Lee Stace

A missed or underpaid provisional tax payment often means a taxpayer is faced with a steep interest cost and potentially late payment penalties on top of what they owe. However, tax pooling can make that go away. A big frustration with Inland Revenue (IRD) is that it expects taxpayers to pay the correct amount of…

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Audit claim data highlights level of IRD’s behind-the-scenes activity

Audit claim data highlights level of IRD’s behind-the-scenes activity 1200 630 Lee Stace

Inland Revenue (IRD) is still actively reviewing taxpayers despite COVID-19 and the various business disruptions the pandemic has caused in the past 12 months, according to figures released by Accountancy Insurance. They saw a 31 percent increase in claims in all categories during the 2020-21 financial year compared to the 2019-20 financial year. In terms…

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Commissioner’s discretion for tax pooling

Commissioner’s discretion for tax pooling 1200 630 Lee Stace

A provision within legislation allows taxpayers to use tax pooling for certain income tax or RWT voluntary disclosures where no return has been previously filed. This is known as Commissioner’s discretion. And it’s worth seeking if a taxpayer satisfies all relevant criteria (see below), as settling these underpaid tax types through an approved tax pooling…

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How tax agents can kick the hourly billing habit

How tax agents can kick the hourly billing habit 1200 630 Colin Kennedy

It doesn’t matter how many times you hear this question; there aren’t many other questions quite as capable of putting an expert practitioner on the spot like a butterfly pinned to a display cabinet than the dreaded: ‘What’s it going to cost?’ For accountants, lawyers and others who sell their expertise, it sometimes seems the…

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How to overcome the pain of tax procrastination

How to overcome the pain of tax procrastination 1200 630 Colin Kennedy

With Inland Revenue (IRD) currently charging a penalty of seven percent interest, you would think that every single business owner in New Zealand would be highly motivated to get their tax issues sorted. Why then, is tax procrastination a problem? Tax is an obligation. We have no choice but to get on top of it.…

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Accessing overpaid tax faster in uncertain times

Accessing overpaid tax faster in uncertain times 1200 630 Lee Stace

Cash is king and being able to get your mitts on it quickly in an unpredictable world where circumstances can – and do – change in an instance is priceless. Just ask the taxpayers who were able to access the provisional tax payments they had deposited in the tax pooling account of Tax Management NZ…

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