In April, 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 cashflow; 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.
Parliament is considering legislation requiring employers to 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 $50,000 per year, so more employers would have to file PAYE information electronically. The dates for payment of PAYE won’t change. Find out more www.ird.govt.nz/payday.
Under the proposals, 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.
This 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, such as Working for Families, during the year.
Businesses will also be able to manage and amend fringe benefit taxes online, and pay by direct debit.
For more information, visit http://www.ird.govt.nz/transformation/businesses/, or check out one of our free webinars at https://www.cchlearning.co.nz/events/cat-58-inland-revenue/.