Date posted: 20/02/2020

Are your client’s taxes due on a weekend?

If client’s taxes are due on a weekend, watch out for penalties and interest but a solution is on the way.

In brief

  • GST payments in March fall on Saturday 28 March
  • Some members have reported interest and penalties being charged when payments are made on the next working day
  • Inland Revenue is prioritising a system fix

Members have brought to our attention concerns regarding how Inland Revenue’s START system is handling tax payments due on a weekend. The next tax payment due on a weekend is for GST returns and payments on Saturday 28 March 2020

Inland Revenue’s Standard Practice Statement 20/01 ‘Tax payments when received in time’ states that: “If a due date falls on a weekend or a public holiday (including a provincial anniversary day), a payment will be in time when it is received at a Westpac branch or an Inland Revenue bank account on or before the next working day.”

Inland Revenue’s system has not been applying this approach.  Some members have identified cases in which tax payments made on the next working day, have had interest and penalties incorrectly applied. 

The NZ Tax Team has raised this issue with Inland Revenue directly and through our National Tax Liaison Group meetings. Inland Revenue has advised that this is a system issue and is prioritised for resolution. We have asked for information to be published on the Top Solutions for Tax Intermediaries website so members can see any updates. 

We know that March and April are an incredibly busy months for our members and we are conscious of the time, cost, and inefficiency of needing to resolve incorrect interest and penalties on a case-by-case basis, as well as the taxpayer uncertainty it creates.  We continue to push for Inland Revenue to resolve this issue as soon as possible.

Inland Revenue has advised that while it will resolve interest and penalties for impacted taxpayers, until there is a systematic fix members can send cases of interest and penalties being incorrectly applied to its agent account manager to be resolved. 

Another option in the interim is for clients to file their returns and make payments before a weekend due date (cashflow permitting). 

SPS 20/01 Tax payments when received in time

Read Inland Revenue’s standard practice statement which outlines when a tax payment will be treated as being received in time.

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