The manner in which we interact with Inland Revenue (now known as IR) is likely to change dramatically over the next two years as the upgrade of IR’s IT system and associated legislation comes on-line. IR’s broad objective is to reduce the amount of time and cost it and private business spends on tax administration by modernising its software platform.
Inland Revenue is working with third party software providers to design digital solutions that will integrate tax obligations into everyday business practices. To ensure the changes are well designed and beneficial to all parties, feedback is being sought on potential changes via a discussion documents.
GST related changes include the possibility of you as a GST-registered person or company to submit your own GST returns through your chosen accounting software programme. This would effectively eliminate the requirement to file a separate GST return, remove the need to double-enter information, and reduce the potential for error. IR’s proposals also include making GST refunds via direct credit to a customer’s bank account compulsory, unless it would cause undue hardship or is not practicable.
PAYE could shift to a semi-automated process, similar to the GST proposal above. Businesses would be able to submit payroll information to the IR direct from their accounting system and make necessary payments to the IR at the same time that a ‘pay run’ occurs.
The changes represent a shift to a framework in which IR’s system would no longer work on a stand-alone basis. Instead, IR would ‘talk’ to software providers, ensure their system worked in accordance with its view of applicable legislation and would then accept what it was sent. Such changes would provide business and Inland Revenue with greater confidence regarding the accuracy and correctness of a tax return.