We’ve resolved an issue where provisional tax was being applied to agents for non-resident insurers and non-resident contractors - who are not required to pay provisional tax.
Non-resident contractors are not required to pay provisional tax. We’ve implemented a fix to identify non-resident contractors when they register with us so provisional tax is not applied to their accounts. We’re updating the accounts of identified customers to stop provisional tax being charged in the future.
Message us in myIR if you have any non-resident clients where provisional tax has been applied incorrectly.
Agents for non-resident insurers
This issue only occurs when premiums paid to non-resident insurers are returned on a Companies income tax return - IR4 by E-File or a paper return. When an agent for a non-resident returns the premiums paid in myIR it is returned on an As-agent (IR1215) and provisional tax is not applied to the account.
The 2020 income tax year is the last year for using E-File. This issue will not occur from 2021 onwards as income will be returned on the IR1215 in myIR.