The rules around IRD payments are changing. The IRD recently issued draft guidelines on when they will consider they have received payment. That all sounds pretty dry but in fact it signals a significant change that could result in penalties for taxpayers who are unaware of the changes.

For years the payment date of a cheque receive via the mail has been the date it was posted. The IRD propose to change this to the date the cheque was received. This potentially is a big change as mail delivery times seem to be continuously declining. The move to a three day delivery timeframe will only exacerbate the problem.

We can’t help thinking that this proposal is a ruse to force taxpayers to settle their taxes using electronic payments.

In addition, payments received the day after provincial holidays (like Auckland Anniversary Day) have always been accepted without penalty by the IRD. Under the proposed guidelines, payments will need to be received prior to the provincial holiday.

Bizarrely in our view, the concession would remain for weekends and public holidays. Don’t get us wrong – we aren’t against the concession but to be consistent we think it should apply equally for provincial and public holidays.

The concessions that currently exist relate to Inland Revenue Department policy and are not enshrined in law. As such, the department is free to make these changes as it sees fit.

The proposed changes for payments by cheque will take effect from 1st October, 2014. No date has yet been set for the provincial holiday changes.