Final update: April tax changes - Bookkeepers€¦ · Bookkeepers UNCLASSIFIED 1 Correct as at 8...

Final update: April tax changes

Bookkeepers

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Correct as at 8 April 2019; subject to change

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Why we’re transforming tax administration

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2016/17 2017/18 2018/19 2019/20 2020/21

Release 1 – Feb 2017

▪ GST improvements▪ NZ Business Number

recognition▪ Digital registration for

migrants and company entities

Release 4 – timing tbc

▪ Changes to investment income filing (mandatory)

Making it easier to manage: ▪ KiwiSaver▪ student loans

Release 5 – timing tbc

▪ Customers able to see all their information in one place

Making it easier to manage:▪ child support

Stage 1Enable secure digital

services

Release 2 – April 2018

▪ AIM (provisional tax)▪ Automatic Exchange of

Information▪ Payday filing

(voluntary)

Making it easier to manage:▪ withholding taxes▪ fringe benefit tax▪ gaming machine duty

Release 3 – April 2019

▪ Payday filing (mandatory)

▪ Reduce PAYE electronic filing threshold

▪ Changes to investment income filing (voluntary)

Making it easier to manage:▪ income tax▪ provisional tax▪ imputation▪ Working for Families

Stage 2Streamline tax

Stage 3Streamline social policy

Stage 4Complete the future

revenue system

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What we’ll cover today

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1. Temporary shutdown

2. Bookkeeper changes

3. Income tax

4. Payroll

5. Other changes

6. Next steps

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1: Temporary shutdown

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• myIR, call centres and offices

o offline: afternoon of Thursday 18 April

o online: morning of Friday 26 April

All back online the morning of Friday 26 April

✓ Website will continue operating.

✓ You can continue to pay via online banking.

✓ We’ll endeavour not to disadvantage anyone.

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2: Bookkeeper changes

✓ Registering as a bookkeeper✓ Getting set up as a nominated person

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Registering as a bookkeeper

• You must:

o have signed authorities to act for 10 or more people

o work in a business/be employed in role where you act or

offer advice and services relating to tax and social policy

affairs of other people

o if an entity – provide the names of key people:

▪ body corporates: each person who has the duties of tax manager,

chief financial officer, chief executive officer, or director

▪ closely-held companies: each shareholder

▪ partnerships: each partner, and

▪ unincorporated bodies: each member

o have a good tax and integrity record.

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• Use the Apply to be an intermediary

service in myIR.

• We’ll then assess your application and let you

know the outcome.

• If we accept your application, we’ll set up a

time to meet you in person.

• Registrations open 26 April 2019.

Registration process

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Example: IR768 statutory declaration

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Example: myIR application process

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• Access to Tax preparer tab – like tax agents.

• One single myIR logon – no more logons for each

client.

• Manage agency/practice, including running agency

activity and summary reports.

• Manage clients’ tax accounts (for example, GST

and PAYE) using your myIR account.

• Create a workspace of clients, or go into accounts

by typing IRD number in.

myIR for registered bookkeepers

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Example: Tax preparer tab

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Example: Client list security

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Example: Agency reports

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Example: Client list report

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Example: Client list report

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Example: Agency activity report

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Example: Key office holders

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Example: Linking/delinking

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Example: Linking

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Example: Linking

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Example: Bringing account into workspace

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Example: All client mail

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Getting set up as a nominated person

• You’ll need to get set up as a nominated person to act on your

client’s behalf if:

o you don’t register as a bookkeeper, or

o if you want to access their accounts in myIR while your

registration is being processed.

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• One single myIR logon – no more logons for each

client.

• Manage clients’ tax accounts (for example, GST

and PAYE) using your myIR account.

• Customers and Accounts tabs on your homepage

have links to all clients and accounts that you’re

nominated person for.

myIR for nominated persons

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Example: Customers tab

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Example: Accounts tab

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• From 26 April, you can get set up as a

nominated person in myIR.

• Two-step process:

o your client sets you up in myIR

o you claim access to their accounts in

myIR.

• We will convert existing nominated person

links, but you will still need to claim access to

myIR accounts.

Nominated person process

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Example: Claiming access to client accounts

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• Current third party tokens will remain, but

you won’t be able to request new ones.

Tokens

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Delegate web logons

• You can let your staff have access to

clients.

• Go to Manage additional logons under

Settings myIR.

• Owners (and Administrators you set up)

can create new delegates.

• Can choose whether staff have access to

your client and/or business accounts.

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Example: Creating a new web logon

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Example: Creating a new web logon

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Client mail

• Most client letters will now be

electronic.

• View copies of letters in your client’s

Correspondence tab.

• Registered bookkeepers can subscribe to

mail notifications.

• Bookkeepers with nominated person access

will receive all notifications by default.

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Any bookkeeper changesquestions? ?

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3: Income tax

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New end-of-year process

• Starts tax year ending 31 March 2019 for individuals

with only salary/wage income and investment

income, including those with expenses.

• End-of-year tax position will be automatically

calculated and sent an Income Tax Assessment

notification between mid-May and mid-July.

• No more Personal Tax Summaries.

• Individuals with other income will need to continue

to file an income tax return as they do now.

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Refunds and debts

• Refunds issued automatically into bank

accounts – either to individual or tax agent acting

on their behalf.

• Debts payable issued with Income Tax

Assessment notification.

$

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Tax codes

• Enhanced processes to help individuals use the most

appropriate tax codes.

• If we think an individual is on an incorrect tax code, we will send

a letter to them and instruct their employer to change the

employee’s tax code.

• If we think an individual is on an unsuitable tax code, we will

only send a letter to them recommending a more suitable tax

code.

• We’re also encouraging the uptake of tailored tax codes.

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Provisional tax: Accounting Income Method (AIM)

• Fits provisional tax in with normal business

processes.

• Pay provisional tax ‘as you go’ based on your income.

• AIM-capable accounting software calculates

provisional tax.

• Can use AIM if turnover under $5 million.

• No Use Of Money Interest (UOMI) if you pay on-

time and in full.

• Only pay when you make a profit, access refunds

during the year.

• Smaller, more frequent payments.

• Visit ird.govt.nz/aim for more information.

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Provisional tax: recent AIM changes

• Join AIM any time during the year.

• Can now turn off notifications to AIM shareholders

regarding provisional tax payments.

• Penalties and interest applied to account during year.

• Clearer end-of-year processes.

• New AIM-capable software providers coming on board.

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Any income tax questions? ?

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4: Payroll

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Payday filing re-cap

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• Now mandatory for all employers.

• File employment information within:

o two working days if filing electronically, or

o ten working days/twice-monthly if filing on paper.

• Can file in advance; don’t need to file nil returns.

• No longer need to file Employer Deductions form (IR345).

• File additional details about new and departing employees.

• Payment due dates stay the same.

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Getting access to Payroll account

• You’ll need to get access to your clients’

Payroll accounts in myIR.

• To get access, you’ll need to have the account

Owner delegate access to you (if you’ll

use your client’s myIR logon).

• How-to videos available on our website –

search for ‘new myIR services’.

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Example: Bulk payday filing

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Example: PAYE return summary report

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Example: PAYE return summary report

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Payday filing top 6 questions

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• Q: When is payment for March employer monthly schedule due?

o A: On or before 23 April 2019.

• Q: How do I file ad-hoc pays/bonuses?

o A: Each time you pay or with employee’s next standard payday information.

• Q: How do I file schedular payments?

• A: If filing electronically, each time you pay or twice-monthly.

• Q: Can I file and pay at the same time?

o A: Yes, but your payments won’t be processed into your account until the due

date.

• Q: How do I delegate access to Payroll account?

o A: In myIR. Account ‘Owner’ should go to ‘Settings’ > ‘Manage additional logons’.

• Q: How do I file my first employment information?

o A: Click on period date, then ‘File/amend return’ in the ‘I want to’ menu.

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Any payroll questions? ?

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5: Other changes

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Working for Families Tax Credits

• No changes to calculations, entitlements or

payment day (Tuesday).

• We’re making it easier for customers to

manage their Working for Families Tax Credits.

• Key changes:

o updates accepted up to day before

payment on Tuesday

o improved look, feel and functionality in

myIR

o easier to grant partner nominated

access, and

o pre-populating information for income

estimates.

• Improvements start from 26 April 2019.

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Donation tax credits

• Improved claim process for individuals.

• Individuals will be able to submit receipts

online through myIR during the year.

• Refunds will still be issued once (at end of

year).

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• More frequent reporting of investment income in an electronic format.

• Affects the following tax types:

o resident withholding tax on interest (IPS)

o resident withholding tax on dividends (DWT)

o resident withholding tax (RWT)

o non-resident withholding tax (NRT), and

o approved issuer levy (AIL).

• Voluntary from April 2019; mandatory from April 2020.

• More detailed information at investor level (including joint account holder

details).

• Non-declaration rate of 45% for RWT on interest income from April 2020.

• PIE annual investor certificates now due 15 May.

• Electronic exemption register.

• Earlier filing date in 2019 and 2020 for year-end interest information (15

May).

Changes to investment income filing

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KiwiSaver

• From April 2019:

o new deduction rates (6% and 10%)

o new names for some features, and

o reducing time period for savings

suspension.

• From July 2019:

o allowing over 65 year olds to opt in, and

o removing the five year lock-in period for

over 65 year olds.

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Short-Process Rulings

• Simpler, faster and more cost-effective

private binding ruling service from 1

October 2019.

• Specifically designed for eligible individuals

and businesses.

• Eligible customers must have:

o less than $20 million annual

turnover, and

o ruling must be about a tax question

below $1 million.

• We’ll keep you updated.

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Amending assessments

• Correct errors up to $1,000 in next return

due (for income tax, GST or FBT).

• Correct larger errors in subsequent returns

(for income tax, GST or FBT) where:

o tax difference is <$10,000 and 2% of

annual gross income/GST charged, and

o not amending to defer payment of tax.

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New website

• Will be live by the morning of Friday 26

April.

• Will include:

o new homepage

o improved look, feel and layout

o clearer, better structured content

o global search across old and new

websites, and

o seamless navigation.

• More content will be available on new

website during 2019.

• We’ll keep you updated.

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Cheques

• We will continue to process post-dated

cheques for the time being.

• Our default method of issuing refunds to

individuals will be via direct credit. To get

refunds quickly and simply, your clients

should ensure we have their bank account

details.

$

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6: Next steps

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Day 1 and what you should do now

• Draft messages will be deleted after 18 April.

• Draft returns will be deleted after 12 April. Any returns that fall

due 18-26 April will need to be filed on 26 April or in advance.

• Get ready to claim access to client accounts in myIR as a

nominated person on 26 April.

• Decide if you want to register as a bookkeeper.

• Decide who needs to access your business’s own income tax

account in myIR.

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More information

• Visit www.ird.govt.nz/bookkeepers

• Read your ‘day one pack’

• Register for webinars at CCH Learning

• Sign up for one of our newsletters

• Connect with us on:

o Twitter

o LinkedIn

o Facebook

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Final update: April tax changes - Bookkeepers€¦ · Bookkeepers UNCLASSIFIED 1 Correct as at 8...

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