Making tax simple and easy for business
In April 2018, Inland Revenue is making changes to streamline business taxes.
Inland Revenue is modernising the tax administration system over several years to make tax easier and simpler. In February 2017, Inland Revenue moved GST onto its new computer system. The upcoming changes will make other business taxes easier to manage too.
AIM – the ‘Accounting Income Method’ – is a new ‘pay-as-you-go’ provisional tax option for businesses with turnover under $5million. Businesses will use approved accounting software to calculate provisional tax based on the current year’s cash flow; they’ll pay provisional tax only when they’re making a profit. As long as the business pays what the software says – on time and in full – there are no penalties or interest. Any overpaid provisional tax can be refunded during the year, rather than waiting until year-end. Business people will have more certainty about their tax, and more time to focus on their business. The software does all the calculations – all the business has to do is enter its accounting information into the AIM software. Read more www.ird.govt.nz/aim.
From April employers will find it easier to submit their PAYE information online and to make corrections. People managing payroll through the Inland Revenue website will notice a new look and feel for the online services, as well as slightly different processes for how you upload information.
Parliament is considering legislation so employers would submit PAYE information every payday rather than monthly. This would be voluntary from April 2018 and compulsory from 2019. Other proposals expected to become law include lowering the electronic filing threshold from $100,000 to $60,000 per year, so more employers would have to file PAYE information electronically. The dates for payment of PAYE won’t change. If the law is passed, employers would be able to file returns directly from payroll software when the information is at hand, instead of holding on to it to submit later.
The proposals would give Inland Revenue up-to-date information to make sure people are paying the right amount of tax and receiving the right amount of support, like Working for Families, during the year.
Businesses will also be able to manage Fringe Benefit Tax online, amend returns online and pay by direct debit.