Coronavirus – IRD Tax Payments

Coronavirus – IRD Tax Payments

Coronavirus – IRD Tax Payments

Inland Revenue have issued advice on tax payments during the Coronavirus pandemic.

With New Zealanders locked down in their homes, and many businesses at a standstill, the department acknowledges that making timely tax payments will be a challenge. Some businesses will be financially distressed at this time. We know from our own clients that some businesspeople are anxious about meeting their terminal tax payment due on 7 April 2020, along with regular PAYE and GST payments over the coming months.

If you ever doubted that these are extraordinary times, Inland Revenue has issued a media release asking people to chill.

“If your business is unable to pay its taxes on time due to the impact of COVID-19, we understand, you don’t need to contact us right now. 

Get in touch with us when you can, and we’ll write-off any penalties and interest.”

In addition, you may want to be proactive and contact the IRD. There is no need to phone them. Their call centre is overloaded at this time so send a message through MyIR.

Something simple along the following lines would be fine.

“With the Covid-19 emergency and the level 4 government mandated restrictions, we are not in a position to meet our tax obligations at this time. Our intention is to pay our outstanding tax liabilities as soon as possible. We may need to enter into an arrangement with IRD to pay our tax liabilities over time. We note that IRD have offered to waive penalties and interest at this time and request that this is applied to any tax in arrears.” 

The department will no doubt issue additional guidance as time goes on but this should suffice for now.

If you want to read the media release in full, please click on the link here.

Should I still file on time?

Yes. We’d still advise clients to continue to file promptly. That means filing payroll electronically along with your GST returns.

I can pay my tax on time.

Our advice is that if you are able to make your tax payments at this time, and you won’t be adversely impacted by doing so, you should still pay on the due date.

Inland Revenue allows payments to be made at any branch of the Westpac Bank. During the lockdown period, Westpac has announced that it will only open one day a week, on Wednesdays between 10am and 1pm.

You can see more information about Westpac’s opening hours here.

Alternatively, there are several ways to pay your tax without visiting the bank. These include internet banking and credit card payments. You can see all the options by clicking here.

I can’t pay the full amount but I can pay by instalments.

Inland Revenue has announced more flexibility for instalment arrangements.

The new minimum amounts are as follows:

  • Weekly payments – $20.00 (this was previously $40.00)
  • Fortnightly payments – $40.00 (this was previously $100.00)
  • Monthly payments – $80.00 (this was previously $200.00)

Applications can be made using MyIR directly. You can read more about that by clicking on the link here.

Update – Friday 9 April 2020

Inland Revenue as released further guidance on how they will deal with relief from Use of Money Interest requests. You can read more abot that here.

Our partners from Tax Management New Zealand have pulled together a useful blog, which you can read here.

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