Calculating income tax

Check out our ideas for the future of tax and find out what small businesses thought of them

Future

Our vision for the future of income tax

Getting your income tax sorted may become easier soon. You can read about changes we are considering below and watch a short video to see what some changes may mean for busy business people like Rawinia.

It’s important to note that some of the examples below would require changes to legislation.  The New Zealand Government has signalled that they are considering all these changes, and more.  You can keep up to date on their proposals at www.makingtaxsimpler.ird.govt.nz (external link) .

Tax becomes a more seamless part of your business

Your accounting software would automatically import sales from online vendors and other income, like interest. That way, you’re more likely to pay the right amount of tax.

Your accounting software may allow you to easily reconcile with your bank account information. We may also notify you or prepopulate your tax return with income sources we know about. That way, you’ll save yourself getting into trouble later.

Since your accounting software could securely communicate with our systems, your income tax return may be generated automatically once you finish your annual accounts. You’d review it and submit it to us, direct from your accounting software. You’d get a confirmation from us straight away, giving you confidence. You may even be able set up a future payment at the same time.

Businesses without accounting software, but keen to work electronically, would still be able to use myIR Secure Online Services to manage their tax.

If you had a quick question, you could chat with an IR team member online, who could see exactly what you were looking at in your myIR Secure Online Service account as they spoke with you.  

Payment plans made easy

If you get behind on your tax, you’d go to our website, set up a payment plan and get a confirmation straight away. Getting a plan sorted and out of debt sooner means less penalties and interest to pay.

Provisional tax improvements

The New Zealand Government is planning changes to provisional tax that would enable small businesses to pay their provisional tax as they earn income, rather than trying to estimate their income ahead of time.  This would be integrated into your accounting software, which could calculate, file and pay your income tax with ease.  For more information, you can view the Government’s Better Business Tax (external link) proposal.

Your feedback

We asked for your comments around the ideas we had and whether you thought they could work for you. Check out a summary of the feedback.

Thanks to everyone who took the time to share their thoughts.

 

Check out what these changes may mean for busy people like Rawinia.

What do you think?

Add a comment

What other people are saying

  • Allowing our accounting software to handle the main areas of GST (already using on MYOB), Fringe Benefit, Employee Schedules would be great. And removing provisional tax in favour of a pay as you go model would make life so much easier.

    Paul Day 20/06/2016 1:07pm (15 months ago)

  • Being able to submit returns, e.g., GST returns directly from xero would be great and would reduce the potential for human error.

    Not having to reference the PAYE tax deduction tables when filling out the online forms would save a lot of time and eliminate another source of human error. Basically the user is currently gathering the information from IRD's tax deduction tables and entering them into IRD's online software. If the software was smarter, it would be able to access the data and calculate the tax, kiwisaver (employee contributions, employer contributions + ESCT) rather than leaving it up to the user.

    Chris Heath 20/06/2016 1:10pm (15 months ago)

  • If the Government is really serious about simplifying tax it should consider abandoning income tax in favour of a turnover tax collected along with GST
    Benefits;

    • A Turnover Tax will not cost the Government the anymore than the current cost to collect GST. Only one item is policed - Sales. A huge cost saving to the Government.
    • It is easy to collect and police
    • It will save businesses the associated costs of paying income tax and PAYE (Tax Accountants Lawyers Payroll Staff etc)
    • It does away with the nuisance taxes - FBT and Entertainment provisions etc.
    • It takes the risk away from small businesses and new businesses of not knowing their tax burden and they can feed it into their margin. – many get caught out with the present system especially in the 2nd year of trading.
    • It would make Exports more attractive, inviting overseas investment
    • It will promote savings by the public as there will be no tax on investment income
    • It will tend to make businesses more efficient – loss companies still pay
    • It will turn Tax Accountants into Management Accountants – Much better for business health and the Country.
    • Likewise Tax Lawyers could be better occupied for the benefit of the Country
    • Very politically savvy – could be slowly introduced say 1% per year with a corresponding lift in the untaxed income for all businesses and wage earners.

    Rouand Scarlett 20/06/2016 1:50pm (15 months ago)

  • As long as all the systems are compatible with each other, I think it's a brilliant idea and if it means less worry and stress for us then I am all for it!

    Joanna McKnight 20/06/2016 2:00pm (15 months ago)

  • Allowing people to pay on account would help small business owners massively. You can do this in the UK under the self assessment process and it reduces the amount of business that end up in collection activities.

    Paula 20/06/2016 3:29pm (15 months ago)

  • what if you don't have an accounting system

    Leigh 20/06/2016 4:54pm (15 months ago)

  • This is in relation to Employee Kiwi Saver deduction. I deduct my tax from my pay as well as the employers contribution which goes straight to my Anz kiwi saver account. I think that i should also deduct the employee contribution straight into my Anz Kiwi saver account, it makes it easy to track the amount of contribution i deduct fortnightly instead of paying it together with my paye tax.

    Fane 21/06/2016 9:33am (15 months ago)

  • Being able to pay GST and PAYE directly from MYOB or XERO would be helpful. New Zealands tax reporting is not hard or onerous (compared to say American state and federal tax regimes that are complex and hair-pulling excercises).

    Another possibility is to have a Direct Debit process available so that amounts declared by online returns are simply deducted on the 20th to save the manual steps in Internet banking

    Ray 21/06/2016 9:37am (15 months ago)

  • Hi Leigh,

    Thanks for taking part! Responding to your question:

    Businesses without accounting software, but keen to work electronically, can still use Inland Revenue's myIR Secure Online Services to manage their tax.

    But using software does have the potential to help reduce the time and effort it takes to sort your taxes.

    - Inland Revenue's Changing for You Team

    Inland Revenue's Changing for You Team 21/06/2016 10:13am (15 months ago)

  • Better integration with accounting packages for GST, income/prov tax and PAYE. But also make IR online services more comprehensive. Reminders and ability to file simply all tax returns due. At the moment I can't even file RWT online I have to fill out the form and post it, and FBT is still outside the my IR login. I should be able to login, see exactly what is due and file it from there. The change has been made by the IRD to ignore the post marked date on any mailed returns/payments, but this has been done at a time when the postage system is now less reliable than ever, so it's not fair that some returns (RWT) must still be filed by post.

    Tracey 21/06/2016 11:16am (15 months ago)

  • 80% of the information required would be easy to automate - it's the 20% that will drive up costs and probably force an increase in effort to submit reliable information to IRD.

    Andre 21/06/2016 4:47pm (15 months ago)

  • As long as i am shown how...i would be happy. I currently use ird online when doing paye and find it fast and efficient so i would be open to using improved systems that are created.

    Re helpful people i have had a very helpful person work with my business debt during the past year and she was wonderful...very supportive and i got through it so again would be open to future working with ird.

    johanna korent 21/06/2016 9:30pm (15 months ago)

  • Super "duper". Even a scared person like myself is getting more comfortable using this medium.
    Message with entities name and not just ird number is perfect. I used to search through 10 entities to establish which one belonged to the ird number in the email.
    This latest email showed name of entity and its ird number.
    Love it

    Estrelita Kahikatea Dickinson 21/06/2016 10:42pm (15 months ago)

  • These changes pre-suppose that small business have up to date accounting records. Many small businesses only put their accounts together when they need to ie when its time to submit a GST return or for the end of the financial year.

    Adrian 22/06/2016 8:57am (15 months ago)

  • Sorry but there is no way to calculate your income tax liability just from transactions in your cash book. What about debtors, creditors, opening and closing stock, work in progress, gains or losses on sale of assets, depreciation, non-deductible expenses (such as 50% of entertainment), private use adjustments (plus or minus), foreign exchange gains or losses, financial arrangement calculations, FIF income, etc. etc. etc.
    "Never fill out another tax return again" is not possible! this is an entirely misleading headline!

    Kay 22/06/2016 11:26am (15 months ago)

  • Thank you for the opportunity to comment.
    Could all tax related documents (returns, notices of assessment etc.) be available for review and downloading in the secure online system, as is currently available with the Companies Office?

    Kevin Kelly 22/06/2016 11:47am (15 months ago)

  • I would strongly support the concept of paying provisional tax as income is earned, rather than trying to estimate income ahead of time. With modern accounting software it is very easy to calculate the tax due progressively through the year however accurately estimating income and tax due in advance can be very problematic (particularly for start-up or rapidly changing companies).

    Roger Hudson 22/06/2016 11:53am (15 months ago)

  • what if you have an accountant manage all this and they dont have the accounting packages you use?

    MARGARET THOMAS AMANI 22/06/2016 1:34pm (15 months ago)

  • My income is sourced across 3 separate sets of business accounts. Two of them are LTCs and I don't see any mention of how this new scheme proposes to deal with the true calculation of tax liability month by month. I would like to pay provisional tax monthly related to actual earnings, including having months when I don't pay anything because I'm on holiday. Currently I have given up on provisional tax and reverted to PAYE so I'm not asked to pay huge amounts of tax when I have no income. E.g. I went on holiday for 3 months from 1 Apr - 9 Jul in 2012. I was expected to pay 1/3 of my annual tax bill in August but I hadn't, at that stage, received any income. Having just taken 3 months off work I didn't have spare funds to pay this and ended up paying substantial penalties bacause I didn't pay tax on money I didn't earn. I notice IRD has dropped the advt campaign saying it is their job to be fair.

    Carol Love 22/06/2016 1:45pm (15 months ago)

  • This will only work if the computer at IRD is really working, something that it is struggling to do now. It also puts a lot of faith in the taxpayers to know what they are doing with accounting software, something that they are also struggling to do correctly. I know this because I have had to spend a lot of time fixing the mess that taxpayers have made with good accounting programmes that they thought they knew how to operate.
    Some of the suggestions sound good but only if they work properly.

    Pam O'Grady 22/06/2016 1:53pm (15 months ago)

  • It should be made much easier for business banking, book-keeping software, and paying income tax to IRD to be folded into a single piece of software or single online platform. That currently online banking can send and receive payments, yet can't be used for book-keeping or payroll; that accounting software can receive records of payments from banks, but can't be used to process payments of invoices or reimburse expenses; and that filing an end of year tax return needs data lifted from both your bank records and your book-keeping software -- That this same data has to be carried across these three platforms, currently leads to a lot of costly and time consuming work and risk of error - when it should be so simple as it is all just the same information. IRD should make it easier for itself, business software, and bankers to work together simply and securely to make this easier for businesses.

    Robin Kerr 22/06/2016 3:32pm (15 months ago)

  • The taxable income for our business varies in different weeks.
    For example during weeks that have statutory holidays profitability is severally down due to wages costs. We do know that precise cost of course.
    Also our stock levels can vary from season to season particularly Easter and Xmas.
    The stock is usually purchased some weeks ahead of the sales.
    Our store stock control system is not integrated with our accounting package and this may be difficult achieve. It is something that is at the early stages of review but could take some time.

    Philip Young 23/06/2016 10:30am (15 months ago)

  • Linking GST forms, Payroll,FBT and other taxes so that they can be submitted from Xero or MYOB would save time calculating and refilling forms. Payroll especially could be a lot easier than using the existing online forms used by IRD. If Xero and MYOB( and others) couldbe encouraged to do FBT, in their programs as well would save a lot of calculating..Good for IRD in recognising the changing environment

    AndyAdams 23/06/2016 10:34am (15 months ago)

  • There is definitely merit in the ideas with PAYE and GST. However I wonder how the IRD will ensure that business owners, who will gain confidence as "we are doing it using online software so it must be right", will actually be complying with Income Tax legislation. There is also other legislation to comply with - Financial Reporting for Companies and so forth. So what is to stop people being too confident, filing with a press of button and then falling foul of the IRD and Income Tax Legislation?

    Yes, I am an accountant so you might so I have a conflict of interest - but I will change my career if I need to, and I am already working more and more as a management accountant than tax!

    Robert 23/06/2016 10:37am (15 months ago)

  • On what I read, it should make business easier to operate and a more efficient interface with the IRD.
    I do like the concept of an overhaul of the current company tax system to one based on Sales Income, collected much like GST, however any streamlining of the current system would be great.

    Neville Newcomb 23/06/2016 11:05am (15 months ago)

  • We have a very small business and do not have or need an accounting software package. This system would force us to have a system we neither want not can afford.

    Raewyn Cleverley 23/06/2016 11:35am (15 months ago)

  • All excellent and helpful changes

    Jim Dahm 23/06/2016 1:03pm (15 months ago)

  • I recently started my own business and found the gst returns so hard to understand i have had to employ a tax agent to reconcile these for me . An expence i would rather not have had, but your call centre was no help to me either.
    No Help to small business operators, and certainly not interested if you are a new client start up business. its too hard for even your call centre to hellp me out. very poor public relations. do you guys get a cut from the tax agent as well.

    Lyn White 23/06/2016 1:04pm (15 months ago)

  • I have tried doing our business PAYE online and it was a nightmare with me having to enter my employees detauls several times so I have changed back to the old system as the new one does not work for me

    Ken Sowden 23/06/2016 2:31pm (15 months ago)

  • A lot of small organisations don't have accounting software packages ( why would you for 1-2 staff and low turnover) but would like to simplify the provisional tax process.

    A.Lilburn 23/06/2016 3:23pm (15 months ago)

  • Hi Lyn,

    Thanks for taking the time to comment.

    We’re sorry to hear you found the GST filing process difficult. Some of the changes we’re proposing, for example securely linking business software with our systems, could make this easier in the future.

    We can confirm that Inland Revenue doesn’t get a cut of tax agents fees. Although agents are required to pay the right amount of tax, just like all Kiwis!

    Inland Revenue’s Changing for You Team

    Inland Revenue’s Changing for You Team 24/06/2016 10:01am (15 months ago)

  • This is an absolute must. As a bookkeeper for numerous clients, to be able to do their Income Tax via their accounting software will save time, money and ease a lot of the stresses. Bring it out quickly, we are all ready to use the new system like we did with your GST returns, wonderful wonderful

    Paula Johnston 24/06/2016 11:31am (15 months ago)

  • What about small businesses that don't use accounting programmes, just spread sheets or cash books. Also a lot of country areas have very slow internet, which generally dies/stalls if you have to go through several screens.

    Sharon Taylor 24/06/2016 1:59pm (15 months ago)

  • A simple quick fix to the current system is to be able to load PDFs to the secure mail system. Currently I have to re-type everything due to hidden formats causing issues.

    Rachel 24/06/2016 2:08pm (15 months ago)

  • Sounds wonderful. I look forward to being able to use Xerox proactively and hope the IRD systems are as simple and in plain English.

    Chris Peace 24/06/2016 3:09pm (15 months ago)

  • I don't use accounting software. I use Microsoft Excel which is free and does everything I need

    Neville 24/06/2016 7:19pm (15 months ago)

  • I agree with your proposed changes and the future vision of IRD. When you mention 'accounting software' you need to be careful though not to create a monopoly or oligopoly system by pre-selecting accounting software products that you feel are a appropriate, which then may result in unreasonable pricing structures for SMEs like ourselves. My suggestion is to determine minimum standards for accounting software, and allow any software supplier to compete in a free market environment.
    You may face a lot of opposition from Chartered Accountants and the like and need to ensure government do not listen only to lobbyism of professional bodies protecting their turf.

    NZ Academic Serviced Ltd 24/06/2016 7:35pm (15 months ago)

  • I am an IR56 taxpayer, not a business. I don't have accounting software and don't earn enough from this income to warrant getting it. I assume and hope the option of completing monthly returns manually online will remain. Perhaps the system could also calculate my tax, student loan, KiwiSaver, etc., rather than me having to refer to a table in a book which only shows tax for monthly amounts up to $780.

    I often see 'information for this period is unavailable' for certain, mostly recent, months on my online IRD account. It would be good if this is fixed whether or not the system is changed.

    Caren 24/06/2016 8:28pm (15 months ago)

  • This proposal would need regular provision of short courses on how individuals could manage this new method, including the security of the system. The issue of security is in doubt from my personal experience. The fact that information supplied to companies office is all over the internet is one loop hole in New Zealand's online registration for anything (with few exceptions maybe). It sometime, or somehow puts you off on many things having to do with online matters.
    This is an important area that needs be handled first, coupled with regular updates, it should work fine.

    Dr Akinnuoye, O.F.A. 25/06/2016 11:02am (15 months ago)

  • Some sort of .csv or text file upload option as an alternative to proprietary accounting software is a must.

    Not all small businesses have proprietary software.
    It would be an indispensable workaround in the event of bugs and incompatibilities at either end.
    Whatever database system runs your backend this would be inexpensive to develop.
    Finally, it ensures unimpeded market entry and thus a competitive market to future software developers.

    In my personal case, if I lost the ability to fill out standard online forms (or if you made it unpreferred to the point of being impractical), then all these 'improvements' will have achieved is added $1000 a year to my costs.

    With such a feature, I think your changes make complete sense, without it I'm dead set against them.

    Sean OConnor 25/06/2016 1:18pm (15 months ago)

  • Automated pre-populated forms and systems will depend on the reliability of data in a business' accounting system. As a tax agent I know this varies immensely between businesses. There would still be a need for a tax agent to review a taxpayers records to ensure they have made all their entitled deductions and appropriate year end adjustments. I am sceptical IRD can get this process right with an automated system. Pay as you earn income tax exists already with Prov tax payable on GST Returns and it doesn't suit those businesses with fluctuating cashflow. I would hope any future changes will be optional for businesses who opt in.

    Amanda 25/06/2016 6:24pm (15 months ago)

  • Hi. We are a very small business (2 people). We currently use a tax agent to prepare our tax return because we are not very confident about doing it ourselves - we don't know the ins and outs. It seems there is more to it than just taxing your income as soon as you receive it. There are also deductions for office costs and depreciation, and all those things. I just send all our invoices and bills to our tax agent who calculates the figures needed and prepares both the yearly financial reports and the tax return. Would the new system you envisage be clever enough to do it all?

    Bene 26/06/2016 8:56pm (15 months ago)

  • The concept of minimising time is great, but accuracy should be paramount. The proposals are not flexible, the one-size-fits-all solutions, are costly to taxpayers and the principle everyone should file and do everything electronically an/or using social media will destroy accuracy. Taxpayers should be able to calculate exact taxable income independent of accounting software supplier deals with IRD such as those being forced upon us (like Xero) What happens when "the cloud" fails?

    Robert 27/06/2016 10:26am (15 months ago)

  • I agree with other comments already made about simplifying the income tax system - this should happen first otherwise you are really just putting in place a bit more acceptance of technology on the IRD's part. You are leaving the confusion of compliance to the rest of us to sort out. If you don't use accounting software, there's no improvement here.

    Leigh 27/06/2016 10:42am (15 months ago)

  • It sounds like a great idea, however it is quite impractical and almost impossible. It is a shame that software developers are encouraging the IRD on this concept purely for their own financial gain by using the IRD to encourage subscriptions to their software. Yes there are competition, but by being a market leader they are more than likely to get a bigger market share. Smaller customers will be encouraged to pay their software subscription fees by saving costs in not paying or services from tax agents.

    Building a new tax system computer system, shouldn't the IRD be building software into their system where businesses can sign up and use software provided free from IRD to complete and file their returns, rather than having to subscribe to third party software? That way IRD could have access to all transactions, as they are providing the software for the preparation of the returns.
    What a slap in the face from IRD to Tax Agents not recognising the work they have done with our mutual clients over the years. IRD has no understanding of the often poor record keeping done by especially smaller businesses, businesses without an administration department, where business owners try to save costs by doing things themselves. "The Easies Accounting Software" Yes the easiest software to calculate and file poor quality GST returns. Yes online accounting software are easier to use, however I am sure ALL tax agents would agree that most clients prepared much better quality returns when they had to manually process all transactions. It is much too easy to click OK till you are done, right or wrong!

    A great system for PAYE and GST, but there are already companies offering these services at a fee. More unrealistic for Income Tax. I would like to think that everybody is paying their fair share. By cutting out the Tax Agent, I am concerned that I will be paying a higher proportion to other tax payers who will simply use the excuse that they do not know or understand, they just filed the return using the software???

    Is the IRD maybe going to look at introducing taxation as a subject in secondary schools?

    As the new generation, growing up with technology become the business owners of the future, they will think they know what they are doing, because they know how to push buttons on apps, but has no real understanding of what they are actually doing.

    Tax are complicated. Is the IRD going to simplify tax legislation to the point where returns can realistically be filed by the press of a button. IRD often bring out new tax rules, creating more complications and having so many holes in the new legislation that it often take several drafts to plug the holes that was never intended to be there.

    E.g. does the IRD think that any accounting software know how to make the newish GST adjustments or how many clients know about and how to make these adjustments? We have not even touched on Income Tax. There are so many pitfalls in the concept as far as Income Tax is concerned, however Xero just want to sell subscriptions and IRD is agreeing without once again having thought it through or have a real good understanding of what they are proposing.

    I hope before IRD implement income tax changes that senior staff in support of the change could have a look at records processed by small business so that they understand what they are looking at implementing.

    IRD and Xero are promoting that Tax Accountants can become Management Accountants, however the reality is that for smaller businesses it is a case of you can take care of IRD yourself without needing a Tax Accountant. Is IRD going to let the errors slide or is the IRD going to pick up the bill for tax compliance currently substantially improved by the use of Tax Accountants?

    Is the IRD maybe going to look at introducing taxation as a subject in secondary schools?

    As the new generation, growing up with technology become the business owners of the future, they will think they know what they are doing, because they know how to push buttons on apps, but has no real understanding of what they are actually doing.

    I hope before IRD implement income tax changes that senior staff in support of the change could have a look at records processed by small business so that they understand what they are looking at implementing.

    Gert Geldenhuys 27/06/2016 10:37pm (15 months ago)

  • we haven't got accounting software yet, just using Excel. Which packages would you recommend to communicate securely with the IRD? at the moment our main focus is to safe money, so free or cheap would be good. we use the excel spreadsheet downloaded from your website under business tools. maybe the IRD would like to supply an entire software package?

    Merle 28/06/2016 11:47am (15 months ago)

  • This all sounds great, but is obviously dependent on the particular accounting software in use. The choice of accounting software may however be driven by particular needs... So this plan is dependent on all accounting software being updated to meet NZ IRDs requirements.

    Gary 28/06/2016 1:25pm (15 months ago)

  • A good scheme as long as it is explained clearly and does not lead to frustration due to lack of preparation.

    Michael 29/06/2016 11:53am (15 months ago)

  • Some of these ideas are great, but some of these may lull people into a false sense of security. I am a tax agent and see people making all sorts of mistakes due to a lack of understanding or knowledge. The tax legislation is quite complicated and making it easier to submit returns will not necessarily improve accurate information being submitted, especially for a business. I think having access to more information such as Withholding tax information from financial institutions will be a big help but this does not need to integrate with accounting software. This just needs to be able to be accessed through MyIR or via an API to tax agents software. The biggest improvement that I think could help would be to have all IRD communications such as statements and letters to tax agents being sent electronically with the tax agent having the ability to automatically send these on to clients at will.

    Mark Lawton 29/06/2016 12:43pm (15 months ago)

  • Great initiatives, well done.

    I hope that these changes will function with desktop-based accounting packages, such as MYOB AccountRight, and not require cloud based access which comes at considerable expense for multiple, small enterprises.

    Tim 30/06/2016 12:35pm (15 months ago)

  • Like someone else I do not use an online software accounting system but your own cashbook system. So I am happy to do it as I have always done it.

    Big Fun NZ 30/06/2016 12:57pm (15 months ago)

  • What is the definition of a 'small' business? The pay as you earn option would be great for larger companies too that have an uneven income stream like main contracting firms.

    Tamara Croft 30/06/2016 2:02pm (15 months ago)

  • We don't have the software so will it affect us at all? Will we be able to run without computer software?

    Janika 30/06/2016 6:44pm (15 months ago)

  • It all sounds too simple & a one-size-fits-all solution is unlikely to be accurate. It would be good to increase the online options available, but not if that prescribes that you must use MYOB or Xero. Yes they are popular in NZ but many small/very small businesses, like myself don't have or want those systems. I use excel & Reckon & that works great & is accurate to send to accountants to review for deductions etc. Not all businesses have a steady income stream & why not leave room for other accounting systems in the marketplace.

    Yvonne 30/06/2016 6:51pm (15 months ago)

  • IRD is basing it's decisions on the ability of software not the users of the software. People need to be informed of the penalties that can be imposed by IRD if they get it wrong. Tax law is very complicated and is not always understood by the general public. I am a Chartered Accountant in public practice and am amazed at what people think they can claim as an expense. GST is also a lot more complicated that most people realise and is getting more complicated each year. Have a look at the tax legislation that was passed in the last 12 months and see how the tax simplification process is working.

    Nick 01/07/2016 2:46pm (15 months ago)

  • The video is simplified to make a nonsense of accounting procedures. How can she "forget" sale of sunhats online when the monies would have been banked into her business account? What about the end of year tax adjustments that may give her further expenses to claim if she was able to buy her stock with delayed settlement but sold all her hats for cash?
    You are suggesting that she has sufficient accounting knowledge to determine her taxable income.

    Software will not replace human knowledge definitely in my lifetime.

    Bruce Sparrow 01/07/2016 4:17pm (15 months ago)

  • Oh my gosh, this would save me soooooo much money in accounting fees!! In fact if I were an accountant I would be pretty worried about the relevance of my job about now!!

    Cheryl 02/07/2016 6:36pm (15 months ago)

  • Need to clarify who looks at accounts before they are filed for year-end. If left to the business-owner, who will be accountable for the accuracy of the information?
    Good idea to minimise the use of accountants in this task, who should be more about advising businesses rather than calculating tax returns.

    Antony 04/07/2016 8:54am (15 months ago)

  • That businesses file their own tax return is absolutely dangerous. Since XERO and the likes have been implemented and making it seem so simple for people to do their accounts, I have spent more time sorting problems out than ever. So many things went wrong, this really is only for people that either understand accounting and bookkeeping really well or have someone employed to do their bookkeeping. Absolutely not working for people that have only half an understanding. Accountants are also there to advice people on what they can claim or can't Whenever I take on a new client and go through their previous tax returns they often missed out on so many claims they can make. This would also eliminate any forward tax planning etc. If you make everything electronic then people would file their tax returns and pay the tax for whatever they have put in. They might forget things like home office cost etc. The system doesn't talk to them and will find out what might happen in the next 1-2 years so that they could plan their tax requirements for the future it would only take into account what has been filed today. Am 100% against it as I have seen that accountants can actually save problems and tax for businesses which makes them far more robust for the future.

    Claudia 04/07/2016 10:00am (15 months ago)

  • As a tax agent I use Orbus - banklink - But I still file GST online - I cannot file PAYE unless I have permission from client so I still send in papers. Would I be better to use MIR for all my filing

    Many thanks
    Weir Accounting

    Mavis Weir 04/07/2016 11:57am (15 months ago)

  • My costs are lumpy over the year so a fixed regular tax on "sales" would not suit. Like others, I am skeptical that accounting software will be reliable enough (while affordable) to identify legitimate income and expenses. However, more streamlined IRD online facilities would be good. Like making Employer Deductions come up as an automated reminder, and a PAYE calculator. Also, since withholding tax deducted by banks and investment managers is presumably linked to an IRD number why can't those details come up on my online income summary?

    Nelson Pomeroy 04/07/2016 12:38pm (15 months ago)

  • Accounting software is only as good as the persons tax knowledge that is entering it. This is what tax agents are for - tax could very easily be overpaid with end of year adjustments missed.

    Sharyn 04/07/2016 4:34pm (15 months ago)

  • You need to simplify the Tax Law before implementing an electronic system of calculating income tax. What you are proposing is simply an electronic filing system which will probably not comply with tax legislation due to the complexities in Tax Law. How do you envisage a computer programme being able to calculate correctly an Entity's Tax Liability i.e.(individual)/(Company)/(Partnership)/(Trust) under the current complex Tax Law ???? All of which goes beyond your simple video samples where it seems a computer programme will magically calculate everything correctly at the click of button and assures the taxpayer he has complied simply because the computer programme said so.

    Alan Kosoof, CA 04/07/2016 7:05pm (15 months ago)

  • You cannot file income tax returns from a cashbook due to year end adjustments such as stock, debtors etc. What about depreciation and mixed use assets? It shows a lack of understanding by the IRD of what is necessary to file tax returns but why am I not surprised?

    David Williamson 05/07/2016 7:31am (15 months ago)

  • What about smaller businesses that don't use accounting software. Is there provision for us to pay our tax and provisional tax on a monthly basis?

    Grant Hammond 05/07/2016 5:59pm (15 months ago)

  • would be a good idea to explain what the hell provisional tax is when we have been paying GST taxes etc all bloody year and then to get a secondary tax you call provisional tax for what?

    Grant Prescott 06/07/2016 12:19pm (15 months ago)

  • This process assumes the taxpayer is proficient at coding and analysing their transactions, with no need for review from a third party (accountant). For most small business people this is not the case. What happens when IRD conduct a review and find numerous (innocent) errors. What about accruals and depreciation - most small businesses operating their own software don't deal with these.

    Jo W 06/07/2016 1:11pm (15 months ago)

  • my business accounts are done in Apple's Numbers spreadsheet software - the suggestions here don't address that scenario - i want simple solutions for simple business purposes. Using accountants and accounting software is a crippling extra cost.

    Martin 06/07/2016 5:45pm (15 months ago)

  • If you have seasonal revenue then you will overpay your tax and then IR will need to refund it over the next few periods. This will impact cash flow and generate additional transaction for no reason.

    Phil Rance 07/07/2016 10:22am (15 months ago)

  • Filing direct from accounting software does two extremely dangerous things.
    Firstly potentially much data is passed on to IRD that IRD have no need for or immediate right to, thus compromising everyone's privacy.
    Secondly this encourages people to file on their own behalf without the help of their accountant, with the likelihood of people paying far too much tax by overstating their income/understating their claimable expenses.

    Murray McKenzie 07/07/2016 3:23pm (15 months ago)

  • You are relying on taxpayers to correctly use their software. In my experience as an accountant, this rarely happens. I would say only 5% of my clients would require no adjustments at end of year.

    Susan Ayton Shaw 07/07/2016 5:28pm (15 months ago)

  • How on earth are people with no tax knowledge be able to decide what they can and can't claim!!

    Alan Brow 07/07/2016 5:55pm (15 months ago)

  • Excellent! It is great that there are so many engaging perspectives and opinions out there. IRD, Could you please collate and list all of the ideas down the left hand side of a document and then add a column immediately to the right for Pro and a column further to the right for Con so that we can review the outcomes of this public dialogue in a more structured format...it will be easier to review and to digest all of the information. Thanks Markku

    Markku Wilson 07/07/2016 10:34pm (15 months ago)

  • This maybe a generalisation however a large quantity of the general public wouldn't understand how to capitalise and depreciate assets at the correct rates, they wouldn't correctly apportion home office expenses, deduct 50% of entertainment as non-deductible, take out non-deductible donations, correctly claim motor vehicle expenses and the list goes on. If a chart of accounts are not setup correctly people will have major issues. A number of people do not understand what drawings are and the difference between profit and drawings. I don't think you will ever get a taxpayer who is completing their own accounts, charging interest on overdrawn shareholder current accounts or declaring dividends. I think your stepping in the right direction but I don't think you have thought about the serious errors which may occur when people do not understand the tax system correctly.

    Amanda 08/07/2016 8:15am (15 months ago)

  • Hi Markku,

    We plan to post general themes in the future. We’d do this on pages where we have lots of responses with clear themes coming through.

    Thanks!

    Inland Revenue’s Changing for You Team

    Inland Revenue's Changing for You Team 08/07/2016 10:35am (15 months ago)

  • I don't want to use external software. Make sure the "free" options get the most investment please - to help the extra small businesses keep their compliance costs to a minimum.

    Rodney 11/07/2016 10:14am (15 months ago)

  • Totally agree to link up accounting systems with lots of benefits.
    However, how do we help those businesses such as one-man band contractors or seasonal businesses WITHOUT accounting systems? Many of them prefer not to have accounting systems because it becomes a (long term) fixed cost or they think not necessary.
    Secondly, entry cost for accounting systems seem affordable but they increase year by year. It can be burden to small businesses.

    vivienne lo 11/07/2016 8:20pm (15 months ago)

  • The liability of tax agents needs to be addressed. At present our clients sign and send returns to Inland Revenue and authorise any communications we make with Inland Revenue on their behalf. This issue has not been addressed which is why we do not use current on line filing facilities. With proposed changes to extend these facilities to include direct communications between information held on accounting software and Inland Revenue the procedure to ensure tax agents are protected in the event of incorrect information being inadvertently supplied need to be outlined. This comment applies to all changes being proposed.

    Alan Hume 12/07/2016 10:07am (15 months ago)

  • Yes, it sounds good in theory. And many people will cotton on and comply; probably the ones that do a good job currently. It is consistent with using technology available to us. I have wondered why interest and RWT doesn't prepopulate the online IR3's now, as the info is already collected by IRD?
    I see an opportunity (and a risk) with the data collected; it would be really good to publish, or have access to the summarised data - revenue and profit by industry; region; number of small/medium/large businesses; average life of a business, etc. Some efficiencies would be possibly with Statistics NZ ?

    Gordon Cameron 14/07/2016 11:59am (15 months ago)

  • Happy with current system, Don't like system changing from year to year.

    Graham Heinz 19/07/2016 8:39am (14 months ago)

  • I agree removal of provisional tax would be an absolute plus however the ability that currently exists to notify IRD by secure email of any changes to Returns required prior to settlement be it Payment or A Refund, is pretty amazing I think - time is often of the essence and a secure email system direct to the department actually is time conscience - we are to quick to recognise the flaws perhaps

    Emere Purewa Reweti 19/07/2016 11:57am (14 months ago)

  • I can only say one thing to all small businesses " There is a lot of better ways IR can help small businesses " . I have been a small business operator most of my working time ( now in my fiftys ) and may be old fashion in a lot of ways but this is not the help small businesses need. Technology/Software is part of progress and I expect that but there is nothing wrong with putting pen to paper and using your brain to work things out. I find filling out a cash book (GST) and a PAYE book keeps me more aware of how my small business is going because I am thinking of where my money is going as I am writing it down. Yes I no this is not practical for bigger businesses but If you think doing everything by computer/emails/online is so good then IR (Government ) needs to take a good look at our society today as nobody writes/reads anything any more yet we all accept this as a healthy . Getting back on track I enjoy doing my book work by pen and paper and working it out plus IR will never be able to set up a system that would work for all (But IR won't care because this is all about them) because every business is run so different ( you can have two businesses selling the same product but are run entirely different). Like I is said at the beginning IR can help small businesses in many other ways. So I disagree with this being great benefit to my businesses.

    David 19/07/2016 9:17pm (14 months ago)

  • Would the new tax system recognise home based businesses where expenses such as power and rates are split between business and home?

    Chrissi 20/07/2016 1:40pm (14 months ago)

  • I'm interested to know how this will work for businesses that are so small that they don't have an accounting package like Xero (too expensive). I hope there will be a way to make the same principles work.

    Tina 20/07/2016 1:52pm (14 months ago)

  • Sooner the better

    Ted Barns 20/07/2016 2:24pm (14 months ago)

  • This could be good but unsure about software. Who supplies it and can you set up your self.

    craig 20/07/2016 3:53pm (14 months ago)

  • I would still like to get our accountant to deal with our tax, is this still an option we have? How is depreciation on vehicles/plant etc accounted for?

    Cheryl Orange 20/07/2016 4:32pm (14 months ago)

  • IRD do seem to make it as easy as possible to file tax returns. However it does take time and one is not always sure that one has done it correctly. An ongoing methodology to tax similar to PAYE would be beneficial to me.

    John Chambers 20/07/2016 6:07pm (14 months ago)

  • Automatically paying tax through your online tax system is a great idea!

    Richard W 21/07/2016 9:03am (14 months ago)

  • Any simplification of the collection of taxation (and the amount of them) in NZ would be welcome! The fact is the amount of time a small business has to spend doing GST returns, PAYE returns combined with H&S requirements that the PC brigade are making us adopt is verging on ridiculous! It is getting to the point that you (a small business) have to have an accountant or financial type person on the payroll to stay on top of it and this is an additional cost that we don't need.

    Surely it can be made as a single payment each month that is calculated by the point of sale system (in use) that requires nothing more than the system to calculate (or audit) and let us (the small business owners) get on with what we do best?

    The PAYE system needs to be exactly the same!

    If the system in use, is incapable of doing what is required by the IR types, then surely it shouldn't be allowed to be sold or operated within NZ and that would be up to the government to enforce?

    Gregory 21/07/2016 11:42am (14 months ago)

  • PAYG is good for business trading in shares, currencies or commodities as no one can sincerely believe in estimate one year ahead. At least PAYG could allow taxpayer to pay his proportion of tax as profitability is secured as time goes by.

    C Song 21/07/2016 1:10pm (14 months ago)

  • Please link to Xero so we can avoid high Accountant bills, Xero is very easy to use, so if you work with them surely you will only create a better system for all. Thinking about the next 30 years, not that last 30.....on how to move forward.

    Scott 21/07/2016 1:18pm (14 months ago)

  • I was amused to read that this concept would save money on accounting fees. Without valid end of period adjustments from your accountant, it will cost you a great deal more in tax. Taxpayers should be careful what they wish for. There is still a very necessary place for an accountant as an intermediary in the process.

    Angus Ogilvie 21/07/2016 2:07pm (14 months ago)

  • Delete individual, company, partnership and trust taxes - GST be the only tax collection.

    K. F. Cooper 21/07/2016 2:14pm (14 months ago)

  • Great .
    Tired of reading about unpaid GST,Paye etc .
    This way instant payment the moment fiqures are available.

    GAT 21/07/2016 2:17pm (14 months ago)

  • We have to have systems that are simple to use.If we can link it to Xero all the better as we use this on an almost daily basis. I am all for it.

    John Steunebrink 21/07/2016 2:24pm (14 months ago)

  • If it gets rid of the accountants annual $5000 account for end of year tax return even though I reconcile all accounts etc - I'm for it.

    Gary 21/07/2016 2:28pm (14 months ago)

  • The tax system is over-complicated, and yet the penalties for getting it wrong are high.

    Considering that most people don't fully understand the complexities of tax legislation (see other comments here), the penalties are outrageous. Especially for small business who cannot afford their own accounts dept.

    All this does is discourage innovation and new business, at a time when the world is moving more and more towards a gig economy and personal entrepreneurship. NZ should be encouraging small business, rather than making it difficult.

    My suggestion:
    Ideally - simplify tax legislation
    Otherwise, recognise that the system is over-complicated - and reduce penalties (maybe for small business up to a certain turnover threshold).

    Mark 21/07/2016 2:59pm (14 months ago)

  • I think linking to our online accounting system is actually a good idea, but wouldn't the information you access revolve around how the accounting system operates and filters information? It would mean that IRD would need to be flexible in accessing any online accounting system provided?

    Felicia Forbes 21/07/2016 3:23pm (14 months ago)

  • I should be able to be one user across the government when doing business for multiple companies in the IRD and companies office. At the moment I need to use different user IDs for each company, and a real me logon for the Companies Office.

    Martin 21/07/2016 4:12pm (14 months ago)

  • It will not work as very small businesses do not have any accounting software so what about those.Even those with software eg Zero do not have the accounting skills to file accurate figures.

    john Robinson 21/07/2016 4:17pm (14 months ago)

  • Hi Why not use the GST reconciliations for the final tax ,It is a pretty close indicator of end of year position because GST payed is the profit Then minus depreciation or plus the write up.and thats it.

    Peter Collins 21/07/2016 5:04pm (14 months ago)

  • While the lure of never filing another tax return again is likely to be strong the reality will prove to be something different.
    To file all of your taxation returns straight from your accounting package will require a level of attention to detail in the use of those packages and the work surrounding the accounting packaging that is lacking in many small businesses right now.
    For the record I am a Chartered Accountant and I own my own retail business that employs 15 staff.
    The need to use professional assistance to help with that added level of attention to detail and timeliness of data entry will increase not decrease. That however is likely to be a good thing for small business not a bad thing.
    I am not against a change but I think we need to go into it with eyes wide open.

    Philip Young 22/07/2016 5:10am (14 months ago)

  • I have seen comments that the government should do away with Income Tax, GST, and other taxes in favour of turnover tax.
    While I agree it would be simpler the flaw is that not all business types generate profits at the same ratio of profit dollars to sales.
    There could be some significant unintended consequences from such a change. A case in point would be that while large supermarkets may make significant profits the bottom line % is quite low. Compare that to the bottom line percentage to fees charged in an accounting practice.
    The challenge is how do you deal with that difference.

    Philip Young 22/07/2016 5:21am (14 months ago)

  • A simple to administer pay as you go tax system for SME's would be fantastic for cashflow management and would surely reduce the incidence of racking up debt with the IR.

    Greg Donnison 22/07/2016 8:16am (14 months ago)

  • I hate the idea of IRD being linked electronically to small businesses.
    When are you going to show us you care about our privacy?
    IRD is a department that harvests our voice biometric data without telling us, and yet is supposed to be "open and transparent." Yuck.
    I wonder if other businesses know that you are harvesting our voice biometrics every time we ring up and your robot asks for our date of birth?
    Personally I think the NZ public deserve better.
    Completing forms by paper might be slower, but I for one value what's left of our privacy.

    Joanne Rolston 22/07/2016 8:54am (14 months ago)

  • I currently manage a family trust that is tax resident 'small company' in New Zealand. The two properties in the trust are partially rented, partially in family use, and generate income that is almost sufficient to cover rates and maintenance. One of the biggest expenses we have is paying an accountant to check the accounts and file an income tax return. Our actual end-of-year tax is usually minimal.

    An accountant can give advice on ways to manage income, expenses, assets and taxes effectively (from the tax payer perspective). What range of advice will the IRD system provide, and what kind of advice should we still seek from a professional accountant, when the new system is active?

    P. Matthews 22/07/2016 1:18pm (14 months ago)

  • I agree with Rouand Scarlett's comments.

    So why try to fix a system that from the beginning has been too cumbersome and too bureaucratic?

    If New Zealand is a nation of inventors, why have we not invented a simpler tax system?

    Why should I be obliged to purchase ZERO and fill the coffers of Rod Drury or any other accounting software for that matter?

    Surely tax reporting doesn't have to be this difficult?

    Why is it that IRD and the Government will not listen to Gareth Morgan?

    Why is it that IRD and the Government will not listen to the Taxpayers Union?

    I am not against IRD where people currently employed in IRD have inherited a cumbersome tax system, so what we need is a NEW tax system that is fairer, leaner, smarter and simpler. I personally don't have the answer for this, but I know there a lot of very clever kiwis out there who do. So please have your say!

    I am sure there are also people in IRD that have the know-how to build a NEW SYSTEM.

    Come on New Zealand, invent & build a better, fairer, leaner, and smarter tax system.

    cheers!

    Andrew Burton 23/07/2016 2:10am (14 months ago)

  • This is another good thinking proposal from the tax department. Well done.

    I am a Builder. and the ONLY! shining light at the moment in a government beurocratic red tape is the tax department, CONGRATULATIONS !
    My life is a MESS with all the paper work and fear created buy the gonverment and local gonverance (if you can call it that. ie
    The LIE that is the LPB system is a time consuming tax excuse.
    New Building coads.
    And the One thousand pound Monkey (out of the cage) Health and Saftey.
    Which has turned into a blood letting Vampritic Monster. The Govenment is trying to do good and save ACC costs but at one HELL of a Social Cost to families. H&S could learn a great deal from the Tax departments positive proactive Approach.

    So thanks again and well done to providing help and hope, not more punishment to the people of New Zealand.

    Shane Watkins 24/07/2016 12:44pm (14 months ago)

  • Anything that streamlines process and compliance is appreciated if the benefits of the change outweighs the risks

    In this case depending on how the system is designed, the increased integration potentially could increase security risks as the system becomes more monolithic. There is a balance as too much focus on security policy is often counterproductive.

    Travis 01/08/2016 8:41pm (14 months ago)

  • Awesome. Already use Xero which is seemless with IRD withs its new GST intergration. This would all be highly beneficial to any business.

    Ian Gould 01/08/2016 10:17pm (14 months ago)

  • I see a few comments in here from very small business owners and whilst I am certainly a believer in the great value of accounting software in tracking your business (not just tax); there are many very small businesses that will not take on something like Xero / Myob. But I believe we could and should do something innovative here. I think IRD should develop a very simple Online Accounting application targeted at small or micro business units. With some accounting simplifications such as using 'payments basis' Gst and also using automatic bank feeds (critical) with intelligent auto-coding (where practical), we could create a robust and very simple & useful system for v.small business operators. As a country, we benefit enormously from this segment; let's help them get on with business instead of struggling with (& worrying about) tax obligations. IRD are certainly big enough to pull this off nicely and can tailor tax rules accordingly for this segment; they too will save many man hours processing returns from these small businesses who use their system. Not the usual activity of a tax agency but its better for all stakeholders if it becomes exceptionally easy to run a small business in a tax compliant way.

    Mike 01/08/2016 11:29pm (14 months ago)

  • I think it's a great idea to make the process of income tax more seamlessly integrated into the process of accounting. The one drawback is that the accounting systems which will be the ones most likely to get the integration (e.g. Xero, MYOB online) are too expensive for a large number of very small businesses (who typically use spreadsheets instead).
    An even better, longer-term solution would be to invest in adapting an existing open-source, free accounting system - GnuCash is the best candidate, in my opinion - so that it would follow all the New Zealand tax rules and integrate this - at least as one of the options. Ideally, this system would be adapted to run via the internet as a multi-user web-based application (at the moment it runs on Windows, Mac, Linux and other computers) - though I am also aware that this would be a significant project and so even if this part of the idea was not done, the rest would be of great benefit.
    Important to ensure that no one is 'cut out' in this process is to make an API (application programming interface) available so that any software system could be connected to the process and integrate in to automatically fill the tax return.
    Since Xero and MYOB are commercial enterprises, in my opinion they should do the work of developing their solutions to match a publicly-available API, and we should have a free alternative (as mentioned above) - this would significantly increase the amount of compliance, reduce the barriers for small businesses thereby increasing innovation and small business success within New Zealand. Since GnuCash is open source, any improvements (especially adapting it to be a multi-user, web-based system) would also benefit the rest of the world.

    John Gillanders 07/08/2016 11:28am (14 months ago)

  • I am very interested in a system such as Rouand Scarlett has proposed

    Ross Derbidge 09/08/2016 9:01am (14 months ago)

  • Anything which makes filing income tax, gst, etc easier gets a thumbs up in my books. Like others have commented on here, I hope there's some flexibility within IRD for those of us who think we're doing the right thing but then ends up we're not. Otherwise you might as well not bother.

    Doria Joyoue 15/08/2016 1:07pm (14 months ago)

  • I think this system looks very good for IRD - off loading the work and responsibility to individuals. Reliance on Accounting Systems is all very well but they are only as good as the person putting in the data. Lots of opportunities to get it wrong. Then what penalties will IRD charge? The Income tax is only an extension of the current ratio method. So not really much change at all. The ability to file forms direct from accounting systems will be helpful but is still filing tax returns. I believe this will make little real change to the small kiwi business that is less than 5 people. Of course Xero etc will make a big profit out of this!

    Hugh Marshall 15/08/2016 7:25pm (13 months ago)

  • I believe that some people do their own dental surgery too.

    Euan 16/08/2016 5:32pm (13 months ago)

  • So this means in future anybody can make any decision they like about tax deductibility? There is in these ideas an inherent implication that all persons filing returns will do so accurately having due regard to the tax rules and keeping abreast of them. That also infers such persons will have trained themselves to understand how to interpret and apply the tax rules, i.e. anyone and everyone is familiar to a high degree.
    As a tax agent now for 16 years, arriving in this industry from another that was rife with fraudulent activity, what is being proposed, to me, clearly has the potential to make my previous career look tame. You are essentially expecting general joe public to be fully conversant with tax law.
    The level of tax ignorance we see every day in our agency is extremely worrying. In fact it has got markedly worse, year on year, since 2007. Currently IRD already levy out IETC rebates and WFF payments to individual filers when the concept of "Taxable Income" is not even understood, many filing based purely on earnings from PAYE employment leaving the rental and investments out of the equation. IRD in many cases, just pay it out, never checking.
    Whilst the idea has merit, such a move will only be highly successful if you also have the capacity and plans to police effectively either via the data exchange, through benchmarks or by creating a regular checking body or mechanism.
    Yes, a move down this path would be good, but not without first carefully thinking through the application of effective auditing safeguards. To do anything less will ensure the tax system will be even more widely abused either via ignorance or by ever increasing deliberate actions. Ultimately all that happens if the tax take reduces is that tax rates go up and honest people pay for the dishonest.

    Kim Mayne 20/08/2016 10:46am (13 months ago)

  • Enhancing the secure mail program through being able to attach a worksheet would save significant time and stress for all concerned, and have the matter for the client actioned faster.

    John Lennie 26/08/2016 11:00am (13 months ago)

  • Pay as you go tax would be a vast improvement for a sole operator like me. My self-driven income has vast peaks and troughs so it is impossible to predict how much I will earn in the future based on what has happened in the past. I would be much more confident - and more likely to continue and grow my own business - if I knew I could pay my tax as soon as I received payment from my clients.

    Melanie 26/08/2016 1:56pm (13 months ago)

  • as a chartered accountant I see frequent, almost daily, instances where clients screw up their expenditure and income classification. To allow or force them to automatically file their tax is likely to result in significant error, and maybe not to the Revenue's advantage. This is a bad idea cooked up by someone with little knowledge of the compliance process.

    Sean Parsons 01/09/2016 2:58pm (13 months ago)

  • We have an accountant do our income tax, what if it is more work for them, and thus we get charged more. Again I hope businesses have the choice. One size does not fit all.

    Janine 05/09/2016 9:09pm (13 months ago)

  • I STILL don't understand Provisional Tax. You want me to pay you money from imaginary future earnings before I have earned it myself? Is that what it is in short? I know that last time I tried to become self-employed that I was faced with a huge unexpected bill for tax that basically crippled my starting out. I personally have no idea what my earnings will be from one year to the next. They literally could jump from 8k to 55k and drop to 8k again. This tends to be dependent on how much money I want to earn and how much of my only life I want to spend sat in front of a desk writing software for a bunch of idiot primates. I'd love to know why I'm asked to pay tax on money I myself might decide not to earn. Or have I got it wrong?

    Janey 12/09/2016 10:48pm (13 months ago)

  • As a Linux user if any software is sanctioned by the IRD, it needs to run on all operating systems and not assume everyone uses Windows or Apple. I am concerned that any large corporation could supply software for IRD use and end up with a monopoly over the market.

    David Hilton-Bright 13/09/2016 10:45am (13 months ago)

  • What about volunteers income if any and rules around employers who do not provide contracts after prolonged working periods for their volunteers!

    Uria Annette Jenkins 21/09/2016 3:45pm (12 months ago)

  • Great video!.... Got very excited that you offered IR Messaging at the end of video to help, however, were do I access this?

    Celeste Moffatt 24/09/2016 6:10pm (12 months ago)

  • Provisional tax as you go would be so much easier than estimating the future!

    Emma 07/10/2016 10:50am (12 months ago)

Now

What happens now

If you earn income from a variety of sources, there’s a chance you could miss out some income or make a mistake tallying your income for your annual tax return.

Not declaring all your income can be serious. Penalties and interest can add up fast.

Filing your income tax return online involves several steps. But only the sections you need to fill out will appear as you work through your return online. Filing paper returns is more time-consuming. Often you’ll need to follow a 50+ page guide to figure out exactly what sections you need to fill out.

Either way, you need to sort your income information in your business records. Then transfer this information to your tax return. Transferring numbers over to your return introduces the possibility of making a mistake. And fixing errors can be time consuming.

If you have trouble paying your tax, you can often set up a payment plan, but approval can take time.

Some main ways to get answers to your questions can also take a bit of time. If you call us when lots of other folks do, you’ll wait on hold to talk to one of us. If you have a myIR Secure Online Services account, you can send us a secure email. It can take up to 15 working days for a reply, although we respond to most emails in around five working days.

Government’s policy consultation

Making Tax Simpler

Government is conducting a separate series of policy consultations on detailed proposals to make tax simpler.

You can find out about these on Government’s Making Tax Simpler  (external link) website.

You might also want to find out more about this website.