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From the 2020 year we’ve made the following changes to income tax assessments and returns.

  • We will not automatically issue income tax assessments for clients of intermediaries.
  • Unless a client is already an Individual income tax return - IR3 filer, we’ll issue an Income tax - more information request which needs to be finalised.
  • You'll have until 31 March to finalise assessments for your clients (if you have an extension of time to file).

If you have clients who require their income tax and/or Working for Families assessment to be finalised promptly, you will need to either:

  • proactively finalise the income tax assessment by - confirming the pre-populated information or providing more information if appropriate
  • encourage your client to finalise their income tax assessment themselves in myIR
  • delink the client prior to us issuing the more information request so that we deal with the client directly.

If your clients contact us, we will:

  • direct any queries about the income tax process to you as their tax intermediary.
  • delink them if requested and ask the client to inform you they have chosen to delink - they are not obligated to do so.

You must not relink the client without a new authority to act.

An on-demand webinar is available to help you through the process of reviewing and finalising assessments.

Transformation webinars

Below are some of the most common questions we’re receiving from tax agents. Hopefully they help make the process little clearer.

At the end of the tax year

After the end of each tax year we'll send you and your clients either an:

  • Income tax - more information request letter (includes schedular income, working for families and nil income clients)
  • Individual income tax return - IR3 in myIR, or a paper copy by post.

To identify what we think a customer needs to do at the end of the year we use multiple data and reference points, including what active income types are in their income profile.

You can find out more about your clients’ income tax return obligations from your client list report.

Issuing of the Income tax - more information request

From mid-May we will start issuing more information request letters until the end of June.

  • Working for Families customers and their partner(s) will also be issued from the end of May.
  • A wash up for any remaining more information request letters will be issued at the end of July.

If your client mail is being redirected, this letter will be sent to you. Otherwise, it will go directly to your client.

We are sending the letters in stages so you will not get them all at once.

Income tax - more information request

All linked clients of an intermediary who receive ‘reportable income’ will receive an ‘Income tax – more information request’ (not IR3 filers). This will include those clients that receive schedular payments and those with nil income in their income profile.

Reportable income includes:

  • salary and wages (or other PAYE income)
  • schedular payments
  • investment income, such as interest, dividends, or Māori authority distributions
  • employee share scheme benefits
  • undertaxed PIE income
  • other income more than $200.

The reportable income provided to us from a third party will pre-populate into the more information request in myIR.

If your client mail is being redirected, this letter will be sent to you. Otherwise, it will go directly to your client.

You (or your client) must review this information (add in any additional income and expenses, if appropriate) and finalise within the required timeframe.

  • 31 March if the client has an extension of time.
  • 45 days after the date of issue if no extension of time.

The letter will confirm the date it needs to be finalised by.

If we do not hear from you within the set timeframe, we’ll assume the information is correct and release the income tax assessment.

Once finalised you will receive an income tax assessment.

Linking and delinking timeframes

Once an Income tax - more information request letter is issued we cannot change the finalise by date. The letter will confirm the date this is to be reviewed and finalised by. If you:

  • link after this has been issued, you will have 45 days to finalise.
  • delink after this has been issued, your client will have until 31 March to finalise.

If you delink after the letter has been issued, you should tell your client to finalise their assessment or it will be held till 31 March.

Working for Families assessments

We will issue more information requests for these clients from 25 May.

You may need to prioritise clients who rely on their Working for Families assessment each year and finalise this promptly.

The entitlement is dependent on family income - the end of year square-up cannot be completed until the income tax assessment(s) have been completed (including any associated partner assessments).

The Working for Families Tax Credits section of the client list report identifies clients who are registered either as the principal child carer or a partner (or ex-partner).

Incorrect filing expectations

Income tax - more information request now an IR3 filer

You can manage this in myIR - when reviewing and finalising the more information request you can indicate you have received other income. The income type indicated will open for you to add in the additional income.

If you electronically file an IR3 this will be recorded as a duplicate return and slow down processing, as manual handling is required. This can take up to 10 weeks to process.

To ensure your client receives an IR3 return for the following year, you should add the other income sources in myIR. To do this go to the 'Summary' tab in your client’s income tax account, select

'Manage' in the ‘Current income types' heading and add the other income sources.

IR3 Income tax return filer and now only has reportable income

You can still file the IR3 electronically. If filing in myIR, you’ll need to record that income type as $0.00.

After the return has been filed, in myIR go to the 'Summary' tab in your client’s Income tax account, select 'Manage' in the 'Current income types' heading and add a cease date to the other income sources, this will stop the client being selected for an IR3 the following year.

Altering and finalising an Income tax - more information request in E-file

You cannot use E-file to update more information requests.

However, you can update details in myIR and through the new gateway income tax service. The new returns service (gateway services) will allow you to alter or confirm a more information request through software. We're working closely with software providers to ensure that this service is available to you in the last quarter of this year, being October 2020 to December 2020. 

Updates and amendments

If you need to amend assessments for clients who only have reportable income you can update their income tax assessment details in myIR. If this is done before the terminal tax due date, your client will receive a new assessment and will not be charged penalties or interest. Your client will have until the terminal tax due date to repay any refund they received as a result of the original assessment, without being charged any penalties or interest.

Client Refunds

Please ensure all client contact details are kept up to date, you can manage this in myIR.

To ensure faster processing please keep client bank account details up to date. This can be managed in myIR or when you are filing their income tax return. Alternatively, you can use the refund redirect option if you hold written authority to receive client refunds and operate a disbursement account.

If you want to set up a disbursement account to receive client refunds, please contact your account manager.

You are not to add your own agency bank account to the client’s account.

To add a client’s bank account in myIR

Use the 'Update a refund bank account' service in myIR to add a bank account for your client. You'll find this in by going into the 'More' menu in the client's income tax tile.

If you are unable to see the 'Update a refund bank account' link, please contact your agency administrator to update your access permissions. You need to have 'Full account' access to add or edit a refund bank account.

To redirect client refunds

To redirect refunds, go to the 'Delink or manage links' section in myIR. Under the refund options select 'Client' and this will change to 'Tax agent'. Submit your changes.

Investment income

From 1 April 2020, there are changes to how investment income is reported to us. We will receive information in more detail and more frequently. You will have more regular visibility of investment income in myIR.

For the 2020 year, investment income will be visible in your client's myIR from the 15 May.

We will split any investment income reported for a joint account equally across all account holders, who have provided a valid IRD number to the payer.

If the joint allocation is incorrect you can manage this in myIR, by typing over the pre-populated income with the correct information. This update is only for the current year and does not hold for future use.

To update invest income percentage for future years this also can be managed in myIR. To do this go to the 'Summary' tab in your client’s income tax account, select 'View details' in the 'Earning summary' and select 'Update investment percentage'.

The percentage split will then remain until it is updated again by you (or your client).

The update will only be made to the individual’s ownership percentage. Other account holders will need to update their details separately.

When PIE income is included

Income from a portfolio investment entity (PIE) is included in the income displayed in myIR but is not included in the income tax assessment unless the PIR rate used was too low.