File returns but if you are unable to pay income tax (terminal and provisional ) and GST at due dates IRD will write off Use of Money Interest and penalties if you meet the criteria.
The IRD have published the following message to all taxpayers:
“If your business is unable to pay its taxes on time due to the impact of COVID-19, we understand, you don’t need to contact us right now. Get in touch with us when you can, and we’ll write-off any penalties and interest.
It would help if you continue to file however, as the information is used to make correct payments to people, and to help the Government continue to respond to what is happening in the economy.”
We do still recommend that if you are able to meet your tax obligations you do so as the detail is lacking on how you will need to prove you were unable to pay to have the interest and penalties written off.
What is the criteria to have interest and penalties written off?
- You may be eligible provided you or your business:
- will set up an arrangement with IRD to repay the tax, but you don’t need to do right now
- has been significantly affected by COVID-19
- has had income or revenue reduced by at least 30% compared to the same month12 months earlier
- have explored other options for financial support, such as talking with your bank about additional finance or re-negotiating other loans/overdrafts, and turned down.
Use of Money Interest could be remitted for a maximum of two years past the date of enactment, but the actual length will depend on the circumstances of each business or individual. If you need our assistance in arranging this, please let us know.
Cheques payments still OK to IRD
IRD have also confirmed that they will accept cheque payments sent to them whilst the country is in lockdown.
PAYE and KiwiSaver still need to be paid.
PAYE will need to be paid to the IRD especially if you have claimed wage subsidies for your employees as with any other deductions from employees’ wages such as Student Loan & KiwiSaver.