CA ANZ recently provided comments to Inland Revenue on draft standard practice statement ED0224: Deduction Notices.

When finalised this statement will set out Inland Revenue’s power to issue a deduction notice to recover outstanding amounts of tax from a 3rd party and to provide guidance on how the Commissioner will use such notices. The Statement updates and replaces SPS 11/04 Compulsory deductions from bank accounts.

In our view the draft is clear and logical, however we recommend the following additions: 

• Commentary on Inland Revenue’s steps to verify the accuracy of the system information
• A statement that IR will take all reasonable steps to contact the taxpayer before issuing the notice, and
• A statement that a deduction notice will not be issued if the debt is in dispute.