A closer look at upcoming changes Webinar for employers & - - PowerPoint PPT Presentation

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A closer look at upcoming changes

Webinar for employers & not-for-profit organisations 22 January 2020, 2:30pm – 3:30pm

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Catherine Simpson, Transformation Account Manager

Welcome to the webinar

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How to participate

Control panel Slides Presenter info Submit your questions here

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R4 lots of difference changes

What we’ll cover today

• What’s changing for employers
• Short process rulings
• Research & Development tax incentive
• Income equalisation
• Working for families tax credits
• Moving on from cheques

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• Employer accounts will be combined into the single

Employer Activities (Payroll) account

• Transactions and payments will show up sooner
• New payment options when filing in myIR

Employer activities and financials move to our new system

What’s changing for employers?

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We’ll group communications by ‘topic’: Start or stop deductions for employees Deductions employers are currently making for employees Notifications that advise of return errors to be fixed Based on feedback received, we’ll have one page per employee Where possible, we’re consolidating employer notifications:

Employer changes cont.

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• New Employee Details (IR346) and KiwiSaver

Enrolment (KS1) forms combined

• Supply employee’s first and last name
• Update employee details broken down
• KiwiSaver status for new employees, not existing

employees

• Advise of income received exempt from KiwiSaver

contributions We’re improving the employee on-boarding process:

Employer changes cont.

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• Account name change from ‘Payroll (was ir-File)’, to

‘Payroll’

• The landing page of the Payroll account will be redesigned
• Employment information (EI) return – breakdown of

different deductions will still be shown

• ‘My details’ tab renamed to ‘Names and addresses’

Employer transactions will display differently in myIR: Collecting additional data from employers – Hours paid (digital channels only)

Employer changes cont.

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Employer changes cont.

The way employers submit information Current state Future state

‘File transfer’ – ‘I want to’ – then choose file to upload from:

• 1. File transfer Payday schedules
• 2. File transfer Payday

amendments

• 3. File transfer employee details
• 4. Upload KiwiSaver file
• 5. Upload compressed zip file
• 6. File transfer employer schedules
• 7. File transfer EMS amendments
• 8. File transfer employer

deductions From April 2020

• Ability to drop off a single CSV

file relating to the EMP account, or zip file of multiple CSV files

• Fields evaluated & feedback
• n any errors identified
• File formats remain

unchanged

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To be completed if applicable instead of using separate tax code on additional line item:

• Employee Share Income (ESS)
• Extra compulsory deduction for student loans (SLCIR)
• Extra voluntary deductions for student loans (SLBOR)

Improved validations for online submissions of employment information New fields added to employment information return: Letters issued to employer and customer when loan is close to being paid off:

• If below $1,000 or expected to be paid in 3 months

Employer changes cont.

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Current summary screen

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Current transaction detail

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• Single return, single account, single payment
• Our new system
• You will see transactions for each type
• Things to note:
• interest and small balance write off

calculation changes

• changes due to consolidation

Design features from April 2020

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Future view of consolidated account

Small to medium employer

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Future view of consolidated account

Small to medium employer

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Future view of consolidated account

Transaction detail

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Future view of consolidated account

Return detail

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Future view of consolidated account

Return detail

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• The payment date
• How employers communicate with us through voice,

paper and electronic channels

• Using paper solutions

What’s not changing?

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• New binding ruling service
• From 1 October 2019

eligible customers can apply

• Apply, pay and track status

through myIR

• Cost: $2000 (inclusive of

GST)

• Turnaround time: 6 weeks
• https://www.ird.govt.nz/s

hort-process-rulings

Short process rulings

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Why an R&D Tax Incentive?

• Government target: increase R&D

expenditure to 2% of GDP by 2027

• Incentivise and support business R&D
• Provides certainty, predictability, and

broad reach

• Applicable from start of 2019/2020 income

year

Research & Development (R&D) Tax Incentive

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• 15% tax credit on eligible expenditure
• Offsets tax to pay/limited refundability
• Applies from 2019-2020 income year
• $50K minimum threshold
• Maximum of $120 million in eligible

expenditures (with waiver)

Research & Development Tax Incentive - Features

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3 pillars to eligibility Eligibility tool and detailed guidance available on our website: www.classic.ird.govt.nz/calculators/keyword/rdltc/calculator-rdti-eligibility-tool.html Contact us: R&DTIteam@ird.govt.nz

Eligibility

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Income equalisation

• Mechanism for specific businesses to even out income

fluctuations by spreading gross income from year to year

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How income equalisation schemes work

Relevant businesses:

• Deposit funds into income equalisation scheme
• Claim the deposit as tax deductible expense
• Request funds to be withdrawn

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Changes that affect customers

• Managed in our new system
• Customers can manage and view in myIR
• Electronic payment methods – no more forms
• myIR – make a payment
• Credit card and direct debit
• ‘My Pay Tax’ option through banks
• Over the counter at banks
• Withdrawals:
• Submit electronic request on myIR
• Paid to customer via direct credit
• Income equalisation code is EQU

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Working for Families Tax Credits (WfFTC)

• New customers –

request backdated entitlement

• Automatically offset

partner’s income tax credit

• Change in payment

due date – 30 days to pay

• New entitlement

instalment arrangement option

IN CONFIDENCE Customer applies for Working for Families, offered the self-service

• ption to request for lump sum

payment of any backdated entitlement to be paid out. If Working for Families partner has income tax credit, it will be automatically offset against PCGs

• verpayment for that year. If the

PCG has income tax refund, this will be automatically offset. New option to repay customer Working for Families overpayment or

• debt. Can set up entitlement

arrangement, use current weekly or fortnightly entitlement to repay. If customer has Working for Families overpayment or debt to pay, they can set up instalment arrangement to make repayments from their bank account. Both primary caregiver (PCG) and partner jointly liable for Working for Families debt. If Working for Families partner has income tax refund, it’s automatically refunded to partner. If PCG has an income tax credit, this is offset towards the Working for Families debt. Customer applies for Working for Families, has to wait until year end to receive back dated payment.

Backdated entitlement Partner’s credit

• ffset

Entitlement instalment arrangement

Future state Current state

vs

30 days to pay

If customer’s assessment is held up due to another person’s details required, and payment due date is less than 30 days in future, they have 30 days to pay. Customer assessment can’t be finalised if waiting for another person’s details – pay date has passed by the time they are advised

• f any amount to pay. Can result in

penalties and interest, need to contact IR to request to have these remitted.

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Cheques no longer accepted from 1 March 2020

Discuss payment options with:

• Your bank
• Your tax agent

Moving on from cheques

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Pay online in myIR

• Debit or credit card payments
• Set up a direct debit in myIR
• Authorise IR to take payments
• Make payment straight away, or future dated
• You will know in advance how much will be debited

Pay on our secure payment website

• Use debit or credit card to pay securely online
• www.ird.govt.nz search “make a payment”

Pay using internet banking

• Authorise your bank to make one-off or regular payments
• Make single payment straight away or set future dated payments
• Schedule regular payments for fixed amount

How to pay

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Pay through Westpac

• You do not need to be a Westpac customer
• Pay by EFTPOS or cash
• Use a Smart ATM
• Bring the barcode on your statement (from 1 July 2020)

Pay through your bank

• Phone or visit your back to discuss options
• Eg direct credits, automatic payments and phone banking
• Automatic payments - allows for 2 people to sign, one-off or

regular payments Pay IR by phone

• New self-service function – SPK2IR – available early April 2020
• Arrange payments over the phone

Payment tips

• Provide IRD number, amount, period you are paying for and tax type

How to pay

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Time for Q & A

Enter your questions

• n your screen in the

“Enter your question” section

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Watch the presentation on demand

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www.ird.govt.nz/webinars:

• Register for future webinars
• Watch previous sessions On Demand
• Webinar presentation pack, questions & answers available on our webpage

Any other questions? Send them to IRTransformation@ird.govt.nz

THANK YOU FOR WATCHING