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Tips for faster processing of returns

Making some simple checks before you file your clients' returns will help us process their returns faster.

Each quarter we'll give you some specific things to check when filing returns during that time of year. Below these, we've outlined some common things to check all year round.

Tips for June to August

Income tax

Individual tax return (IR3)

Income adjustments for Working for Families Tax Credits (WfFTC) and student loan borrowers

If your client has a student loan or is eligible for WfFTC, you may need to notify us of adjustments to their income. This is so we can correctly assess your client's student loan repayment obligation and/or make sure they receive their correct WfFTC entitlement.

An Adjust your income (IR215) form doesn't need to be filed if no adjustments are required.

If you need to file an IR215, tick the box at key point 9A on the IR3 return and attach an IR215 form. If you tick the box and don't attach an IR215, the return can't be processed and we'll send a letter asking for it.

Income with tax deducted

When completing key points 11A - 11E on the IR3, copy the amounts from your client's summary of earnings into these key points. You don't need to round the figures up or down in these key points. You must show the same as what is on their summary of earnings. If you know the information on the summary of earnings is incorrect, please give an explanation of why there's a difference in the return. You can do this through secure mail or attaching a letter to the return.

If your client has received a personal tax summary (PTS) and all you need to add is interest and dividends, don't send an IR3. Please send us the information through secure email or write in.

Claiming expenses

Expenses need to be accounted for in the correct key point to avoid duplication. This will speed up the process as no further customer contact will be needed.

Key point 12C

Key point 12C should only include expenses related to schedular payments. This may include ACC personal service rehabilitation payments made to your client or to your client's caregiver.

Key point 26

The only expenses that should be accounted for at key point 26 are:

  • fees paid for completing your client's tax returns
  • commission on interest or dividend income (not bank fees)
  • additional expenses incurred in earning partnership income, eg, interest on capital borrowed to purchase a share in the partnership
  • interest on money borrowed to buy shares or to invest - as long as the investment will produce some taxable income
  • premiums on loss of earnings insurance (income protection), provided the benefit from the insurance policy is taxable, and
  • interest paid to Inland Revenue for late payment of tax, only if the interest is not already included as a deduction in your client's accounts.

All other expenses should be reflected in the net income shown at other key points in the return, eg, self-employed income.

Losses brought forward

If your client has losses brought forward then key point 28A must be completed on an IR3 return. Key point 28B must be completed if losses are being claimed for this financial year.

Where do you find the net loss to bring forward?

We'll have sent you the amount of net loss to bring forward after we sent the previous year's return acknowledgement or notice of assessment.

When your client is moving overseas

If your client:

  • is moving overseas
  • will be a non-resident for part of the year, and
  • needs to file a part-year return

an IR3 must be completed (not an IR3NR) for the year they depart New Zealand.

The return must include a list showing the income they earned as a resident and as a non-resident. Staple this list to the top of page 3 of their IR3 return.

A Non-resident income tax return (IR3NR) must be completed only when a client is outside of New Zealand for the full tax year.

Bankruptcy

If your client has been declared bankrupt, two part-year income tax returns must be filed:

  • one part-year return under the original IRD number (pre-bankruptcy) from 1 April to the official date of bankruptcy, and
  • another return under the new IRD number from the date after they were declared bankrupt to the end of the tax year.

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Donations - tax credits

We can't release any tax credits for donations until we receive your client's IR3 return. To speed up the tax credit claims process please send in your client's Tax credit claim form (IR526) with their IR3 return.

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Trusts/estates income tax (IR6 filers)

Income tax return: Estate or trust (IR6)

When completing an IR6 make sure the:

  • trust has an IRD number and that it's included on the return, and
  • total income at key point 17B equals income allocated to beneficiaries at key point 18A and income allocated to the trust at key point 18B.

When a trust or estate has ceased and you're filing a final IR6 online please include the cessation date. This will speed up the processing of cessation requests.

Estate or trust beneficiary details (IR6B)

When completing key point 24I - is the estate/trust paying the tax on the beneficiary income on an IR6B, if you answer:

  • No - key points 24K and 24S should not be completed as income is transferred directly.
  • Yes - key points 24K and 24S should be completed.

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Partnerships and look-through companies (LTCs) (IR7 filers)

Companies

If a company has losses brought forward, key point 25A must be completed on a Companies income tax return (IR4).

If the IR4 is a nil return for the current year then an Annual imputation return (IR4J) still needs to be completed.

If a company has loss offsets/subventions payments to other companies a Company shareholders' details (IR4S) must be completed and attached to the IR4.

The opening balance on an Annual imputation return (IR4J) must match the previous year's closing balance, and the appropriate credit or debit box ticked.

A current IR4J must be filed before a transfer or refund request is sent. This will make sure that these requests can be processed quickly as they can't be completed until the required IR4J is sent in and processed.

Look-through companies (LTCs) 

A Partnerships and look-through companies (LTCs) income tax return (IR7) is required to be filed if a company is an LTC. An IR4 doesn't need to be filed.

A Look-through company (LTC) income/loss distribution (IR7L) form is the attachment required for an LTC to record LTC owner(s) income loss/distribution details and is attached to the LTC's IR7 return on completion.

A Partnership income/loss distribution (IR7P) form is the attachment required for a partnership to record partners' income loss/distribution details and is attached to the partnership's IR7 return on completion.

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General information

Clients with "restricted status"

If your client has a “restricted status” please don't print a paper return off our website and file it. This increases the risk of the return being processed outside of the “Special Files” process. All restricted status customers will have an “X” in the DLN of their return.

Provisional tax

An election to use, or to stop using the ratio method to calculate provisional tax, cannot be made on an IR3. Certain criteria apply when changing to the ratio method or when exiting this method. Contact us by secure email or phone if you are not sure whether your client meets the criteria and to make any changes.

Credit/payment transfers

When requesting a credit/payment transfer on a return make sure all key points are completed, eg, the IRD number, location (eg, 001, 002), tax type (eg, INC, FAM), and the amount to be transferred. Please make sure you also include the IRD number, location and tax type the credit/payment is being transferred to.

If you're requesting a credit/payment transfer please make sure the entity receiving the transfer is registered for the tax type you're transferring to.

Filing

When filing any return, make sure the dollars and cents are in the correct boxes.

Common things to check when filing and/or paying

Here are some common things to check before you file your clients' returns or make a payment.

Payments

If your clients are making a payment to us, please advise them to include their IRD number on the payment remittance slip, not your agency's IRD number.

Return reassessments

  • If you need to reassess a client's return, including if an error has been made in the return, don't send in another return with the corrections on it. You must provide this in writing along with any supporting information.
    Read SPS 16/01 - Requests to amend assessments for more information.
  • If you don't follow the correct process, we may send duplicate returns back to you.

Nil GST returns

  • When filing nil GST returns make sure you put "zeros" in box 15. This is a mandatory field. If zeros aren't entered this will cause the return to fall into error and delay processing.
  • Before sending us a GST return, make sure your client's filing frequency aligns with the month you're filing for.

Business cessation

  • If your client has sold their business as a going concern to another GST registered person, and you're filing a Business cessation (IR315) form on your clients' behalf, please provide the:
    • purchaser's name
    • purchaser's GST number
    • sale price
    • date of the sale.
  • Make sure you include the sale price of the business sold in key points 5 and 6 of the relevant GST return.
  • If you only require a no-objection letter for removal of the company from the Company Office Register, you don't need to use an IR315 form. Send us your request by secure mail or write in.
    Find out more about your obligations with income tax

IRD number applications for non-resident/offshore persons

Online

IRD numbers - individuals

IRD numbers - businesses and organisations

Paper

IRD number application - non resident/offshore individual (IR742)

IRD number application - non resident/offshore business (IR744)

Make sure you include all information noted on the landing page for the online services or requested in the  "Applicants Checklist".

We'll accept one of the following to confirm your client has a fully functional bank account:

  • A New Zealand bank statement or print out showing the client's name, bank account number and at least one deposit and one withdrawal of differing amounts, to confirm the account is active.
  • A letter from the bank showing:
    • your client's name
    • your client's bank account number, and
    • a clear statement confirming that the bank account:
      • is fully functional, or
      • is an active bank account, or
      • has had due diligence completed in accordance with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009.

Alternatively proof that your client has had customer due diligence (CDD) completed on them by a NZ reporting entity can be provided –

  • Online - a letter from the reporting entity, or
  • by paper a letter from the reporting or the reporting entity can complete the CDD panel on the application form.

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