For more detail on all these changes, including screenshots, you can watch one of our webinars live and on-demand.
Individual income tax assessments
This year we’ve changing how we issue income tax assessments to your linked clients receiving reportable income only (i.e. they are not IR3 customers).
Any clients you're linked to, at the time we process them, will not be automatically issued with an income tax assessment. Instead we will send an ‘Income tax – more information request’. 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) will need to review, add any more information needed, and complete the assessment. If you (or your client) don't review and complete the assessment, we'll complete it automatically:
- on 31 March 2021 if your client has an Extension of Time (EOT)
- after 45 days if your client does not have an EOT.
Changes for employers
myIR and payroll accounts will look a bit different. All employer accounts (for each payroll profile) are combined into a single Employer Activities (Payroll) account to manage Employment Information transactions and obligations. As a result of these changes:
- transactions are grouped and presented differently and show up sooner
- correspondence about employee changes is grouped so we will not write to you as often
- you may be asked to provide more information about employees such as hours paid, if you have it
- small balance write-offs, late payment penalty thresholds and use of money interest thresholds will now apply to the overall employer account balance, not each sub-account individually
- we’ll notify employers when an employee’s student loan is almost repaid - telling them the final deduction amount and the new tax code
- the new employee details (IR346) and KiwiSaver (KS1) information is one form.
Investment income reporting
Providers of investment income benefits or payments should be aware that:
- they need to start filing electronically, in more detail and more frequently from 1 April 2020
- there is a new exemptions register for you to check (instead of asking the person you are paying to provide you with an RWT certificate of exemption)
- the new non-declaration rate for RWT on interest income will be 45% from 1 April 2020.
Direct debits in myIR
You and your clients can continue to pay us by credit card, debit card and online banking. But now if you choose to pay by direct debit in myIR from a new bank account a direct debit authority will need to be set up.
- This replaces the old process where you confirmed you had signing authority on a bank account by ticking a box when you set up the payment.
- Setting up the authority is a one-off process and will need to be done separately for each new bank account before a direct debit payment can be made.
- You can no longer initiate a direct debit payment for your client to approve in myIR. If your client wants to pay us by direct debit, they'll need to set up an 'authority' for their own bank account in myIR
- You can continue to pay by direct debit for a client if you have signing authority on the bank account being used (such as if it’s your agency's own bank account) after you have set up the authority in myIR.
The student loan repayment holiday has been renamed to “temporary repayment suspension” to make it clearer that this is a temporary break.
If you’re linked for student loans, you can bring your client’s student loan accounts into your workspace.
Working for Families customers whose income tax returns can’t be finalised because their partner has an extension of time have an extra 30 days to pay any balance owing, once their partner’s return is processed.
We no longer accept payments by cheque, including cheques dated after 1 March.
We’re developing a new and improved Tax Technical website – the first stage will be ready soon.
Short-process rulings are a way for individuals and organisations, with an annual gross income of $20 million or less, to apply for a binding ruling on how a tax law applies to a situation.
Research and development tax incentive
The R&D tax incentive provides a tax credit at a rate of 15% of eligible R&D spend up to $120 million. To be eligible, your clients need to spend at least $50,000 per year on eligible R&D.
Rental loss ring-fencing
From the 2019-20 income year onward, new rules apply to losses claimed for residential properties. Residential property losses are now be ring-fenced, meaning that they cannot be used to offset other income.