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Proposed Changes in PAYE Reporting

Proposed Changes in PAYE Reporting

sr_finals_small_web-4381Article by Carolyn Jackson

AUDIT AND TAX DIRECTOR, STAPLES RODWAY TARANAKI

Carolyn.Jackson@staplestaranaki.co.nz

 

The Government is modernising New Zealand’s tax system to make it simpler and more certain for many New Zealanders. They have just announced a number of proposed changes to the administration of PAYE. The proposed changes are likely to be included in a tax bill to be introduced to Parliament in 2017.

A summary of the proposed PAYE changes are:

PAYE information to be filed

Employers would no longer be required to file an employer monthly schedule; instead they would file PAYE information on a payday basis from 1 April 2019.

PAYE information is the information employers are required to provide to Inland Revenue when they make payments of PAYE income, including the information on the employer monthly schedule and the Kiwisaver 1 Form.

Payday means the day on which an employer makes a payment of PAYE income to an employee. Instead of being aggregated across a month PAYE information will be provided each payday whether weekly, fortnightly or monthly.

Filing returns

Employers using payroll software would be able to file their information directly from their payroll system.

Employers would not be required to use a payroll software but would still have to file their PAYE information on a payday basis.

The smallest employers will still be able to file their PAYE information on paper forms if they choose to do so. However, the threshold for electronic filing of PAYE information would reduce from $100,000 a year of PAYE and Employer Superannuation Contribution Tax (ESCT) deductions to $50,000.

Proposed due dates

The due date for PAYE information from employers above the electronic filing threshold, will be the second working day after payday.

The due date for PAYE information from employers below the electronic filing threshold who do not use payroll software and for those who have an exemption from the requirement to file electronically will be seven working days after payday.

The Government is not proposing to change the dates by which PAYE and related deductions have to be paid however employers will be able to make these payments on payday if they choose to.

Payroll Subsidy

The payroll subsidy, which subsidies employers to outsource their PAYE obligations to listed payroll intermediaries, would cease from 1 April 2018.

 

Other changes in the near future

Inland Revenue are focused on their Business Transformation project and we are also about to see changes in the processes for filing GST returns and taxpayers myIR services for GST.  There will be changes and enhancements in reviewing GST accounts on-line, making transfers between periods, and there will be other features such as the ability to email IR via the myIR system.  The implementation date is expected to be early 2017.

 

If you have any questions on how these and other proposed changes will affect your business please your Staples Rodway representative.

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