Date posted: 10/03/2020

Changes are coming: Business Transformation – Release 4

Inland Revenue’s services will be reduced in April ahead of Business Transformation – Release 4.

In brief

  • Some IR services will be offline between 9 – 16 April
  • Draft returns in START will not be saved during this time
  • Key changes include automatic assessments for clients of tax agents, changes to investment income reporting, and the RWT exemptions register

Inland Revenue’s START system will change again in April as part of Business Transformation – Release 4. 

The following Inland Revenue services will be unavailable between 9 April and 16 April while these changes are implemented:

  • IR Offices
  • myIR
  • E-file
  • IR call centre
Members should be aware that any draft returns in START at the beginning of the shutdown period will not be saved during the ‘go-live’ process.

The Inland Revenue website will still be available and if tax agents need support during the closedown, they can contact their agent account manager.

Resources to keep you ahead of the changes 

We have been encouraging members over the past couple of months to attend the tax agent webinars Inland Revenue has been running. Recordings are available to watch on demand along with copies of the slides and speaking notes if you missed the sessions.

The March edition of Agents Answers contains practical steps within myIR on the changes to redirect client refunds, finalise assessments following a ‘request for more information’ and updating investment income allocations.

Inland Revenue will run seminars around the country between 1 and 8 April. Details on how to register will be available on the Inland Revenue website shortly.

The ‘top solutions for tax intermediaries’ webpage will be updated regularly and  include a live call wait-time tracker.

Changes to automatic income tax assessments 

One of the key messages the NZ Tax Team heard from members following Business Transformation – Release 3 was that they did not want automatic assessments to be issued for taxpayers linked to their tax agency. In response, Inland Revenue has made changes for the 2019-20 income tax year. 

Inland Revenue will not issue automatic assessments for clients of tax agents, instead a ‘request for more information’ will be issued (to be finalised by the tax agent), unless the client is already an IR3 filer. Tax agents have until 31 March 2021 to complete their clients’ assessments.

This means a client’s assessment will not be finalised until you have reviewed and confirmed their information. If you (or your client) don't review and complete the assessment, Inland Revenue will 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. 

Inland Revenue’s March Agents Answers outlines the process for finalising an assessment (a link to this is provided below). 

Changes to investment income reporting 

From 1 April 2020, investment income providers must file electronically and provide more detailed reports to Inland Revenue by the 20th of the month following the investment income being paid. 

Investment income refers to interest, dividends, portfolio investment entity (PIE) income, taxable Māori authority distributions and royalties.

All withheld tax must be paid by the 20th of the month following the month in which the investment  income was paid to the investor. If the recipient of investment income has not supplied their IRD number, the ‘non-declaration’ RWT rate of 45% will apply. If they have supplied their IRD number but not specified a tax rate, the default rate of 33% will apply.

Some clients may not have checked or updated their details with their investment provider recently, and they should do so before 1 April to avoid the ‘non-declaration’ rate being applied.

If taxpayers have a joint account, members should be aware that Inland Revenue will split any investment income reported equally between all the joint account holders who have provided their IRD numbers. Joint account holders may not always wish to allocate income evenly. If this allocation isn’t correct for your client, you can update the allocation in myIR.

Inland Revenue’s March Agents Answers outlines the process for updating the allocation (a link to this is provided below).

RWT exemptions register  

Inland Revenue has introduced an online RWT exemptions register that lists the IRD numbers of taxpayers exempt from having RWT deducted from the interest and dividends they receive. From 1 April, payers of investment income will access the register to confirm exempt status of their customers. They will no longer ask for or accept physical exemption certificates. 

If a taxpayer has an exemption under an Act that is not administered by Inland Revenue, they may need to contact Inland Revenue to be included on the register. 

Charities registered with Charities Services will be automatically added to the register. 

CA ANZ Tax Roadshow  

This year our NZ Tax Team will start its roadshow the same week as Inland Revenue’s system comes back online. If you’re attending one of our 21 sessions around the country, our presenters would love to hear how you’re approaching and implementing the changes. 

Members are welcome to email the tax team at [email protected] 

March Agents’ Answers

Inland Revenue’s March Agents’ Answers newsletter outlines the process for finalising assessments following the changes to automatically issued income tax assessments for clients of tax agents.

Find out more

Business Transformation webinars

Register for upcoming webinars about our Business Transformation Programme. You can also watch past webinars on demand. Registration links will be made available as we get closer to each session.

Watch the recordings

Top solutions for tax intermediaries

Find out about all of the new myIR changes, issues, and information that may affect tax intermediaries.

Read more