Some of the biggest changes to our tax system coming from 1st April 2019. Almost every taxpayer will be affected by these changes. Below we look at some of the changes coming in the next few months.
Automated tax assessments
Majority of the taxpayers in New Zealand have income which are taxed at source such as PAYE on wages, Interest on Savings etc. Normally these taxpayers will go to tax refund companies to file their tax returns in order to get their tax refunds. Not from this year, IRD have automated this process which means automated tax assessments will see around 1.67 million New Zealanders get a tax refund paid straight into their bank account.
Under the new payday filing system employers now have to file “payday” returns more frequently wit the IRD, within 2 working days if filing electronically. Payday filing will replace the employer monthly schedule (EMS). Employers who deduct $50,000 or less in PAYE (small businesses) will be able to file paper returns which should be filed within 10 working days after the payday. Read our article on payday filing for more information on this.
Tailored tax codes
Employees paying too much tax on a secondary job will be able to apply for tailored tax codes from 1st April 2019. IRD’s new system will enable users to apply for these tax codes online. IRD will also closely monitor the tax paid by wage and salary earners through the year. If it appears the worker is being over taxed, Inland Revenue will suggest a more suitable PAYE tax code tailored to that worker.
Donation tax rebates
With IRD’s new system taxpayers will be able to upload your donation receipts online throughout the year using myIR. The IRD will issue refunds at the end of the year once tax returns have been processed.
The above changes are part of IRD’s goal to making tax simpler.