Issue 52 May 2003 (Payroll News)

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Payroll News - 2003

Issue 52 May 2003

what to do if you stop paying wages
tax due date reminder stickers
due date reminder
updated publications
correction to the Fringe benefit tax return guide (IR425)

What to do if you stop paying wages

You must let us know if you have stopped paying wages, even if your business is still operating. This is so we can stop sending you employer forms each month.

You need to complete your final Employer monthly schedule (IR348) and Employer deductions (IR345) or (IR346) form up to the date you ceased employing. There is no change to the due dates for these forms.

When completing the final schedulers well as completing each employee's finish date, please also note on the schedule that you have ceased employing and give the date that you ceased.

If you ceased employing some time ago but have continued to file nil monthly schedules, just phone us on 0800 377 772 and tell us the cease date. We can then stop sending you employer forms each month.

Note

If you continue to provide fringe benefits to former employees after you have ceased as an employer, you'll need to keep filing FBT returns.

Tax due date reminder certificates

We have a supply of Tax due date reminders (IR319) stickers available, which you can put on your calendar to remind you when your PAYE is due. Each IR319 sheet contains enough "PAYE due" stickers to cover a whole year. We also have stickers to remind you when other taxes are due, for example GST. You can order these stickers by phoning INFOexpress on 0800 257 773.

Due date reminder

With the availability of Tax due date reminders stickers, this would be a good time to remind you of what PAYE forms need to be sent to us and when.

If you pay your deductions to us monthly, your Employer monthly schedule (IR348) and Employer deductions (IR345) or (IR346) forms and payments are due by the 20th of each month after the month of deduction. For example, PAYE deducted in April 2003 is due by 20 May 2003.

If you are required to pay your deductions twice a month, your Employer monthly schedule (IR348) is due by the 5th of each month after the month of deduction. However, your Employer deductions (IR345) or (IR346) forms and payments are due as follows:

deductions from wages paid to employees between the I st and the 15th of the month are due by the 20th of each month of deduction.
deductions from wages paid to employees between the 16th and the end of the month are due by the 5th of each month after the month of deduction.

Example

PAYE deducted between 1 and 15 April 2003 is due by 20 April 2003. PAYE deducted between 16 and 30 April 2003 is due by 5 May 2003. The employer monthly schedule for the whole of April 2003 is due By 5 May 2003.

Note

Monthly payers are employerswhose total PAYE deductions (including any SSCWT) in any 12-month period; does not exceed $100,000.

Twice-monthly payers are employers whose total PAYE deductions (including any SSCWT) have gone over the $100,000 threshold in the previous year ending 31 March.

For new employers, the deductions will have to exceed $100,000 in the first year before you need to start paying the PAYE to us twice-monthly.

If you are unable to pay the full amount by the due date, please contact us as soon as possible. By contacting us early there may be a reduction in the penalties and interest charged after the due date. We will discuss your current circumstances with you and help you work out the best option for dealing with the amount due. Options for consideration are:

payment in full
an instalment arrangement where you repay the amount over time
write off of the amount due if we determine that full payment would cause you serious hardship
a combination of an instalment arrangement and a write-off.

Updated publications

Check our website at for a list of publications, which may be of interest to you as an employer. You can get these publications from our website or order copies by phoning INFOexpress on 0800 257 773.

IR56 taxpayer's handbook (IR356)

Updated in March 2003, this booklet is for:

part-time private domestic workers
embassy staff
nannies
New Zealand-based representatives of an overseas company
Operation Deep Freeze workers who make their own PAYE payments.

Correction to the Fringe benefit tax return guide (IR425)

We've noticed an error in the Fringe benefit tax return guide (IR425) for both the 2002 and 2003 years. This error affects quarterly FBT filers who used the multi-rate calculation.

If you followed the instructions on completing the fourth quarter multi-rate calculation sheet in the return guides in either of the 2002 or 2003 years, and the benefits you provide are liable for GST, you will have underpaid the total payable. We apologise for any inconvenience this may have caused.

This article explains how to calculate the correct amount and make an adjustment for this in your next FBT return.

Page 21 of the guide for both the 2002 and 2003 tax years states that when you calculate the FBT to pay in the fourth quarter, you will need to total the amount of FBT that was assessed in the previous three quarters. Although this in itself is correct, the guide then goes on to show that the figures for the previous three quarters should be taken from Box 8 of each of those returns to arrive at the assessed amount. In fact, the values should be taken from Box 6, not Box 8.

The result of taking the values from Box 8 instead of Box 6 means you have deducted the total payable, including any GST payable in the first three quarters from the total fringe benefit tax payable for the year, instead of deducting the FBT payable in the first three quarters,(from Box 6). The result of this means the liability for the square-up in the fourth quarter is incorrectly reduced by the GST payable in the first three quarters.

If you have filed your FBT return for the quarter ended 31 March 2002 and/or 31 March 2003, and you have used the values from Box 8 of your returns when calculating the fringe benefit tax assessed in quarters I to 3 on your multi-rate calculation sheet, your FBT would have been underpaid by the value of the GST payable.

If you used the multi-rate calculation sheet instructions as stated on page 21 of the return guides for the 2002 or 2003 fourth quarters, please re check your calculations. If after checking your calculations you find you have used the values from Box 8, you will need to recalculate using the values from Box 6 instead of Box 8. The underpayment should be included in Box 7 of your next FBT return, along with any GST payable in that quarter.

If you need any further information, you can phone us on 0800 377 772.