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Transforming Inland Revenue Te Whakahou i te Tari Taake

Proposed changes for individuals - simplifying income tax

We’re working on some proposed changes to make tax more straightforward.

The Government has proposed a number of changes to simplify the end of year tax processes for everyone. These changes are subject to legislation going through Parliament.

If the proposed legislation is passed, starting from 1 April 2019 there are a number of changes that could affect you.

Who will these proposed changes affect?

All individuals whose only income is from salary or wages and investment income, for example, interest on bank deposits, where tax has already been deducted.

What will the proposed changes mean for end-of-year tax?

If your only income is from salary, wages or investments such as bank deposits, we’ll send you an Income Tax Assessment notification to finalise your end-of-year tax information automatically. Under the proposed changes, we will no longer be issuing Personal Tax Summaries. This means you will no longer need to request, receive and confirm a Personal Tax Summary to claim a tax refund.

If you have another source of income such as from business, rental property or from overseas, or have expenses that can be claimed, you’ll need to provide us with more information and file an income tax return (IR3). This is similar to the current process for finalising end-of-year tax, but we’ll be making it easier for you to do it online.

If you have paid too much tax during the year and are due a refund, we’ll pay the refund directly into your bank account. To get refunds quickly and simply, you will need to make sure your bank account details are up-to-date because we will no longer be issuing refunds by cheque.

If you have not paid sufficient tax during the year, there will continue to be a range of payment options available including payment plans. You will generally have until February the following year to pay any tax owing.

Helping you stay on track

If we notice that it looks like you are on the wrong tax code, and you’re paying too little or too much tax, we’ll notify you and suggest a more suitable tax code.

This improvement will help you pay about the right amount of tax and, if you’re eligible, receive the right Working for Families entitlements, during the year.

Donations

We’re also making some improvements to the claim process for donation tax credits, which will give you the option to submit receipts online during the year. This will help you avoid missing out on a refund for donations if, for example, at the end of the year you’re unable to find all your donation receipts and run out of time to get a copy.

Refunds will still be issued at the end of the year.

Do I need to do anything?

We recommend that you keep your details with us, including your bank account, up-to-date. You can do this securely through your myIR account or by contacting us directly. If you don’t have a myIR account and would like to set one up, you can do it here.

Remember, these changes are still just proposals being considered by the Government. This means they could change before they come law.

More information about how these changes could affect you are available at changingforyou.ird.govt.nz