Final update: April changes 30 March 2020 Tax Agents and - - PDF document

1 Tax Agents and Bookkeepers

Final update: April changes

30 March 2020

UNCLASSIFIED This content is correct as at 24 March 2020; it is subject to change

Greetings everyone, and welcome our webinar. My name is Trish Spence-Manning and I am an External Relationship Manager at Inland Revenue, working with tax intermediaries and professional bodies from around the country. Today’s webinar is all about the next round of improvements in our transformation, and how they’ll affect you and your clients. For those of you who have seen our webinars, some of today’s content will be pretty familiar and we’ll recap some of the information. There is also some new content and screenshots. Just a quick note, the content of this webinar is correct as of 24 March. Some details may change. Before we start, let’s go over a few house keeping notes.

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Welcome to our webinar

Trish Spence-Manning External Relationship Manager

I’d like to run through what you should be seeing on your screen, and how to interact with us. In addition to the presentation slides on your screen you’ll see a small control panel at the bottom of your screen that contains a few buttons. When you click

• n each of these buttons, you’ll see they either open or close some of the

features which may already be open on your screen. On the left of your screen you’ll see the slides box on which you’ll see the presentation slides. You should also see a Q&A box on your screen. By clicking in this box – in the “enter your question” section, you can send through any questions. Other participants won’t be able to see your question but they will come through to us. We will collate all questions, get them answered and send them out to all participants via email so it is important to send questions through.

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How to participate

Slides Presenter info

In these extraordinary circumstances, ensuring people get their entitlements, including their COVID-19 relief, is an essential service and Inland Revenue’s top priority. We are now required to operate very differently, including how we work with you, our tax agent community. Our phone services will be severely limited and the only effective way to contact us, will be online and through myIR. Within Inland Revenue, all front office services in all localities are now closed and all of

• ur staff, except a small number of special exceptions, will be working from home.

Inland Revenue remains committed to implementing the latest round of our transformation changes in April. Maintaining the pace of IR’s transformation is important and any delay increases the risk that we won’t be able to meet customers’ needs at this difficult time. By moving to the new platform (START) in line with our current plan, we increase our agility to respond swiftly to situations such as Covid-19 which gives the Government more flexibility to help New Zealanders. Please be assured that the people who work at Inland Revenue will be doing their very best to make sure all New Zealanders get what they need as soon as they need it. That is

• ur top priority.

We will be providing more detail on things you need to know as this situation develops. You can find current information at ird.govt.nz/covid19 Business continuity package. On Tuesday 17 March 2020 the NZ Government announced a Business Continuity Package to help those struggling with the economic impact of the COVID-19 coronavirus pandemic.

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Responding to COVID-19

• Essential services - our priority
• Contact us online and through myIR
• Business Continuity Package tax relief

and income assistance

• ird.govt.nz/Updates/News-

Folder/tax-relief-coronavirus

• Other tax relief for businesses
• ird.govt.nz/covid-19-novel-

coronavirus/tax-relief/tax-relief-for- businesses

To find our more please visit www.ird.govt.nz/Updates/News-Folder/tax-relief- coronavirus Our normal options for re-estimating provisional tax, setting up instalment arrangements, remitting late payment and filing penalties, and severe hardship debt write-offs are available. We encourage impacted businesses to take advantage of them. To find out more about further proposed tax changes to help businesses with the impact of COVID-19 go to https://www.ird.govt.nz/covid-19- novel-coronavirus/tax-relief/tax-relief-for-businesses If you have clients who are struggling due to the impacts of COVID-19 coronavirus, we strongly encourage you to contact them to discuss how we might be able to help.

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It’s important to remember that these changes are part of the broader transformation of our revenue system. So before we get into the detail, let’s just briefly revisit the reasons behind the transformation. Some of you may have seen these next slides before. Inland Revenue’s transformation is a major government investment to make tax and payments simpler for New Zealanders. Everything continues to be in the mix – government policy, streamlining our processes and re-organising Inland Revenue so that we have the right people with the right skills closest to the customer. This transformation will make tax and payments simpler for New Zealanders by:

• increasing voluntary compliance by having a simpler tax system
• reducing compliance costs for customers, particularly small businesses
• making it easier and less costly for Government to introduce policy change.

The benefits we’ve committed to include:

• customers will find it easier to meet their obligations and receive their

entitlements

• there will be a reduction in compliance costs for our customers
• the revenue system will be simpler and more resilient
• time and cost to implement (policy) changes will be significantly reduced

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Why we’re transforming tax administration

Transformation has gone from being a high-level plan at the end of 2015 to reality. It is being implemented in four broad, over-lapping stages – digital services, tax, social policy and a final wrap up. The systems, processes and legislative settings that support taxes and entitlements are being modernised in a series of releases within these stages. Major releases are occurring every year from 2017 to 2021, each one aligning with the beginning of the tax year in April. This is now well underway, with the first three releases having been implemented. The previous set of changes – Release 3 – went live a year ago. This was the largest BT release to date. We acknowledge that it had a significant impact on tax agents and bookkeepers due to the introduction of new legislation, new systems and a new website. We are now implementing Release 4. It covers a range of changes including:

• PAYE will be fully administered in our new system
• Electronic and more regular reporting of investment income becomes

mandatory

• We introduce an electronic RWT exemption register
• The administration of student loans is simplified and more automated
• There are some changes around the Working for Families Tax Credits

We’ll cover these, and more, today.

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Our transformation

2016/17 2017/18 2018/19 2019/20 2020/21 Release 1 – Feb 2017 Making it easier to manage GST: ▪ file and pay at same time ▪ amend previous returns ▪ set-up instalment arrangements and direct debits ▪ NZ Business Number recognition ▪ Digital registration for migrants and company entities Release 4 – April 2020 Making it easier to manage: ▪ KiwiSaver ▪ Student loans ▪ Investment income information reporting (mandatory) ▪ New R&D Tax Incentive ▪ Short process rulings ▪ Income equalisation Further changes for employers: ▪ Single employer account ▪ Coordinated approach to notifications Release 5 – April 2021 Making it easier to manage: ▪ Child support ▪ Paid parental leave ▪ Duties ▪ Unclaimed monies ▪ Customers can see all their info in one place ▪ Changes for WfFTC Stage 1 Enable secure digital services Release 2 – April 2018 Making it easier to manage: ▪ withholding taxes ▪ fringe benefit tax ▪ gaming machine duty ▪ Wine equalisation tax (WET) ▪ AIM (provisional tax) ▪ Automatic Exchange of Information ▪ Payday filing (voluntary) Release 3 – April 2019 Making it easier to manage: ▪ income tax ▪ provisional tax ▪ imputation ▪ Working for Families ▪ Payday filing (mandatory) ▪ Reduce PAYE electronic filing threshold ▪ Changes to investment income information reporting (voluntary) and KiwiSaver Stage 2 Streamline tax Stage 3 Streamline social policy Stage 4 Complete the future revenue system

We’ve broken then information into eight sections. So, here’s what we’ll cover today: 1. Temporary shutdown 2. Income tax (annual returns, automatically issued assessments) 3. Changes for employers 4. Investment income 5. Prescribed Investor Rates 6. Working for Families Tax Credits 7. Student loans 8. KiwiSaver 9. Changes to E-File 10. Other changes 11. Next steps and more information During this we’ll be looking at changes to myIR. There are a number of things we won’t cover in detail but we’ll point you to some great online resources to help you, including previous webinars and the tax technical website.

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What we’ll cover today

• 1. Temporary shutdown
• 2. Income tax (annual returns, automatically issued assessments)
• 3. Changes for employers
• 4. Investment income
• 5. Prescribed Investor Rates
• 6. Working for Families Tax Credits
• 7. Student loans
• 8. KiwiSaver
• 9. Changes to E-File

10.Other changes 11.Next steps and more information

Firstly – as we’ve done with previous phases, we need to temporarily close down most of our customer facing systems while we implement our next round of

• changes. We have practised this closedown period so we have a good idea of how

much time is needed. Our priority is to have a stable system for customers and staff. Our temporary closedown starts at 3pm on Thursday 9 April. From this time myIR secure online services will be unavailable and our phone lines will be

• closed. Our offices will already be closed for the covid-19 lockdown.

Services will resume on Thursday 16 April. Please note if COVID-19 restrictions still apply, front offices will remain closed and our phone services will be severely limited. The only effective way to contact us will be online and through myIR. During the closedown, you can still pay your bill through your bank as you normally would and access our website. We recognise that this is still an inconvenience, however we’ll endeavour not to disadvantage any customer as a result of the shutdown period.

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1: Temporary shutdown

All back online the morning of Friday 26 April

myIR, call centres and offices

• offline: 3pm Thursday 9 April
• online: Thursday 16 April

Back online Thursday 16 April

✓ Website will continue operating. ✓ You can continue to pay via online banking. ✓ We’ll endeavour not to disadvantage anyone.

Now we’ll look a bit more at what this means for activities during the closedown period Please note: If you have draft returns or draft secure mail in myIR, these will be

• deleted. Be sure to complete these before 3pm on Thursday 9 April so you don’t

lose them. Filing due during closedown

• Employment Information (EI) returns for payday filing that are due over the

temporary closedown need to be filed on Friday 17 April.

• For returns due on 9 April note that our systems will be unavailable from

3pm.

• E-File will continue to be available to tax agents during cut-over, but IR

won’t process any returns until we restart our systems. As we send return acknowledgements a day or two after returns are submitted you might notice a slight delay in receiving them. Weekly Working for Families payments

• If you receive weekly Working for Families payments and are expecting a

payment on either Tuesday 14 April or Wednesday 15 April, you will receive your payment early, on Thursday 9 April or Friday 10 April. The RWT Exemption Register will be unavailable during our closedown. This will mostly impact payers of investment income.

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Preparing for Day 1

• If you have draft returns or draft secure mail in myIR, these will be
• deleted. Be sure to complete these before 3pm on Thursday 9 April so

you don’t lose them.

• Employment Information (EI) returns for payday filing that are due
• ver the temporary closedown need to be filed on Friday 17 April.
• For returns due on 9 April note that our systems will be unavailable

from 3pm.

• Working for Families payments for Tuesday 14 April or Wednesday 15

April will be paid early, on Thursday 9 April or Friday 10 April.

• RWT Exemption Register will be unavailable during the closedown.

In this section we’ll look at some changes around income tax.

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2: Income Tax 2: Income Tax

Last year for the first time we automatically issued individual income tax assessments for around 2.9 million customers. While this worked very well for a large number of people, we have changed our approach for clients of tax agents. Individual income tax assessments

• This year all linked clients of tax agents who receive reportable income only

(i.e. they are not IR3 customers) will not be automatically issued with an income tax assessment. We will send an ‘Income tax – more information request’. If client mail is being redirected this letter will be sent to you – if not it will be sent directly to your client.

• You (or your client) will need to review, add more information if needed, and

complete the assessment.

• If you (or your client) do not review and complete the assessment, we’ll

complete it automatically:

• n 31 March 2021 if your client has an Extension of Time (EOT)
• after 45 days if your client does not have an EOT.
• We estimate this will affect approximately 151,000 customers who were

automatically issued an income tax assessment last year.

• If you know your client has income that requires them to file an IR3 eg. self-

employed income or rental income, you can update their ‘Current income types’ in myIR.

• Based on feedback from tax agents we have also changed the wording on

this confirmation step so it represents potential income, not actual income.

• Previously, customers who receive schedular income also had to file an IR3.

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Automatically issued income tax assessments

No automatically issued income tax assessments for clients you are linked to

• Your linked clients’ ‘Income tax – more information request’ will be

sent to you (when client’s mail redirected to you)

• You can finalise assessments in myIR or in the new returns service

(via Software in Returns Service)

• Need to review all clients
• Customer queries directed to you

Now they are part of the new automatically issued income tax assessment process as schedular income also meets the definition of reportable income. They will always be in the ‘Income tax – more information request’ group so they can tell us about any expenses they want to claim. What this means for tax agents

• You have full control of finalising your clients’ income tax.
• You will not have to spend time returning incorrect refunds or amending

assessments.

• You can arrange for transfers of any refunds to other accounts, rather than

your clients receiving them.

• We will direct any queries we receive from your clients about the automatic

assessment process to you.

• If you have clients who require their assessment to be finalised promptly,

you will need to either :

• Proactively finalise the assessment, confirming the pre-populated

information or providing more information where appropriate, or

• Encourage your client to finalise their assessment themselves in

myIR, or

• De-link the client prior to us sending the “more information

required” request so that they receive an automatic income tax assessment.

• To ensure your clients receive any refunds they are entitled to, please

update their bank account details in myIR. Or you can use the refund redirect option if you hold written authority to receive client refunds and

• perate a disbursement account.
• If you want to set up a disbursement account to receive client refunds,

please contact your Account Manager.

• You are not to add your own agency bank account to the client’s account.

What this means for your clients

• To receive a refund, a client will wait for you to update their information and

finalise their assessment. Like most features in myIR, if your client is registered, they can see and update the assessment themselves.

• Working for Families assessments cannot be completed until your client’s

income tax assessments have been finalised (including any associated partner income tax assessments).

• If you delink a client after we have issued the Request for more Information,

you should make your client aware of the need to finalise their assessment

• therwise it will stay on hold until 31 March 2021 (if they have an extension
• f time).

Timing

• This year the automatic income assessments will run from mid-may for

approximately 4 weeks.

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Now we’ll take a quick look at the myIR changes for Shareholder AIM tax credits. From the company’s perspective:

• A new field will be added to the IR4S called ‘Shareholder AIM tax credits’ for

you to complete

• A non-editable field will be added to the IR4 which will have the total of the

‘Shareholder AIM tax credits’. This image shows the IR4S field.

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Shareholder AIM tax credits field

The information from the IR4S will be added to each shareholder’s income profile. A new field will be added to the IR3 called "Shareholder AIM tax paid" which will pre-populate with the tax credit information from the IR4S.

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Shareholder AIM tax paid

Summary IR3 income tax return Income profile

From the 2019-20 income year onward, new rules apply to deductions claimed for residential properties. Residential property deductions will now be ring- fenced, meaning that they can only be used to offset income from residential property. This means that the residential property deductions you claim for the year cannot exceed the amount of income you earn from the property for the year. Any excess deductions must be carried forward from year to year until they can be

• used. You cannot use excess deductions from your residential property to reduce

your other income, such as salary and wages or business income, which would result in a reduced tax liability. To reflect this there are now new income fields in the INC return. You’ll find more at ird.govt.nz/rental-deductions

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Residential rental income

ird.govt.nz/rental-deductions

Now we’ll talk about changes for employers. PAYE will be fully administered in the new system and will simplify and streamline employer obligations across deductions. The next few slides will focus on some of the key impacts for employers. This will be of interest to you as employers (in many cases), for those who file on behalf

• f your clients, or for advising your clients.

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3: Changes for Employers

Employer transactions will look a little different in myIR as they are aligned with payday filing. Here’s some of the key changes you’ll notice:

• Transactions from payday filing and payments made will show up a lot

sooner as we will no longer have the financials in our old system.

• You’ll notice a change in the account name from ‘Payroll (was ir-File)’ to just

‘Payroll’.

• The landing page of the Payroll account – shown here - has been redesigned,

with a summary screen showing the account balance, registration details and any recent activity.

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myIR Employer transactions - Payroll

In our old system there were six employer related accounts to manage the components employers withhold from employees’ pay. One for each of:

• Pay as You Earn deductions
• student loans deductions
• child support deductions
• employee KiwiSaver deductions
• employer KiwiSaver contributions
• employer superannuation contribution tax deductions

These are now combined into one Employer Activities (EMP) or as you know it a Payroll account that provides a single view of all employment activities. This means the current view of transactions split by PAYE sub-account headers will become…

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Single employer account

Current view

…a single employer account. This image is an example of the transactions in the consolidated payroll account for a small employer. There can be up to seven transaction types (dependent on the deductions made by the employer). Each transaction will show as a separate assessment, based on due date. Due to this single account for EMP, the $20 small balance write-off threshold and $100 penalty and interest threshold will be across the single account instead of across the six accounts. Each time you file an employment information return the transactions will update (reverse and replace) to include the return you have filed. You can see the breakdown

• f each deduction type (e.g. PAYE, student loan deductions etc.) represented as

different assessment transactions. You will see the balance of each assessment component increase each time you submit an EI. In this example the first EI filed contained $718.64 of payroll deductions but after the second EI was filed, payroll deductions now shows $1,437.28. This makes it easier to see the balance to pay on the due date.

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Single employer account

New view

• 2. Second EI filed for 28/05/20 payday which now includes Child Support deductions – other assessment transactions have reversed/been replaced.
• 1. EI filed for 14/05/20 payday, amount column shows total payable so far.

Clicking the link to the right of each transaction will show the split between each EI filed that makes up the transaction. Here you can see that both EI’s submitted included payroll deductions of $718.64.

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Single employer account

To quickly summarise the payment codes: There will be a new code, EMP, which will allow employers to make one payment to cover all their employer associated deduction types. The codes for the remaining associated employer deduction types will be removed. This means that customers will no longer be able to make payments using the following codes: CSE – Child support employer KSE – KiwiSaver employee KSR – KiwiSaver employer PAY – Pay as You Earn SLE – Student loan employer SSC – Superannuation Scheme Contributions Customers will still be able to make payments using the employer deductions payment type (DED). Other new codes have also been introduced to allow customers to make payments for Income Equalisation, Environment Restoration and Research and Development.

• ERA – Environment Restoration
• EQU – Income Equalisation
• RDI – Research and Development Tax Incentive

We’ll talk more about income equalisation later.

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Summary of payment codes

EMP is a new code for Employer Activities DED - Customers will still be able to make payments using this employer deductions payment type Other new codes: ERA – Environment Restoration EQU – Income Equalisation RDI – R&D Tax Incentive EMP replaces the following codes which will no longer be available:

• CSE – Child support employer
• KSE – KiwiSaver employee
• KSR – KiwiSaver employer
• PAY – Pay as You Earn
• SLE – Student loan employer
• SSC – Superannuation Scheme

Contributions

When we convert the financial transactions from our old system to our new system, some transactions will no longer show. As we are moving to a single account view, payments that were applied to PAYE and then transferred out to the sub-account, eg student loan deductions, will no longer be visible. Instead there will be the single PAYE payment covering the full assessment amount.

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Converting Transactions for Payroll

• Before and after conversion

Current state Future state

We will consolidate communications to employers, reducing the number of notifications we issue:

• Where possible we will provide employers with a single list of actions for employees;

rather than separate notices.

• We will take a coordinated approach to correspondence by combining into one letter,

notification, report or contact, information about:

• multiple employees requiring the same changes, or
• a single employee with multiple changes

We’ll group our communications by ‘topic’. The 2 main groupings of letters will be:

• Updates to an employer’s employment information to start or stop deductions for

employees

• Updates to deductions employers are currently making for employees (for example

notification of a tailored tax code) Based on feedback received, the letters will have one employee per page and display all updates for that employee. This will make it easier for employers to align any correspondence received for their employees to their personal files. Employers will now receive a letter when an employee’s student loan balance is expected to be repaid within three months based on repayment history. The letter will advise of the amount left to pay, to ensure the loan is repaid in full, but not overpaid. We may also contact you about errors you are making in your employment information returns.

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Consolidating employer notifications

• Single list of actions
• Coordinated approach to correspondence
• We’ll group communications by ‘topic’:

Start or stop deductions for employees Deductions employers are currently making for employees

Includes a new notification when an employee’s student loan is nearly paid off

Further changes to the onboarding process for new employees will reduce confusion and repetition of information for employers, making it easier for them to maintain the details for all their employees. Changes include:

• The ‘New Employee Details’ (IR346) and the ‘KiwiSaver Enrolment’

(KS1) will be combined into one ‘Employee Details’ form (shown here) both in myIR and on

• paper. Employers will
• nly need to provide

information for new employees once

• currently they need to provide

the same information twice for new employees: once for KiwiSaver and the other for general PAYE details.

• Employers will be required to supply an employee’s first and last name

when completing an employee onboarding request, along with the name the employee will have displayed

• n

the Employment Information

• return. If this information is not provided, the request will not be able to

be submitted.

• The existing service to update employee details will be broken down into

smaller sections, allowing employers to update specific information as required.

• As a one-off, employers will need to advise us of any income that will be

received by a new employee that is exempt from KiwiSaver contributions.

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Improving employee onboarding

• Combined forms - IR346 and

KS1

• 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

A new Employment Information (EI) return has been designed to accommodate the additional fields for:

• Employee Share Scheme (ESS) benefits,
• extra compulsory deductions for student loans (SLCIR),
• and extra voluntary deductions for student loans (SLBOR).

Previously employers had to add a new employee line for each of these deductions. Now they can use these new fields to record these deductions in the same employee line they are reporting gross income, PAYE and other deductions. i.e. they won’t need to have the same employee on multiple lines in their EI because of these deductions. The new return version also has two new fields to capture adjustments to gross salary / wages and PAYE. You can use these fields to record changes made to salaries or wages and PAYE from past paydays in your next payday (rather than amending the

• riginal employment information return). There are specific rules about when you can

do this. The new return version will be available for customers who:

• file on paper or onscreen in myIR and will use the new version of paydays from 1

May.

• use the file upload service in myIR or file direct from their software once their

software providers have implemented the new version (sometime over the next 12 or so months). Until that time you can continue to use the old version. You will collect more information from employees which will assist us to better administer social policies, for example hours paid. Reporting this information will be voluntary and only collected via digital channels.

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Submitting employment information

• New fields instead of using

separate tax code on additional line item:

• Employee Share Scheme (ESS)
• Extra compulsory deduction for

student loans (SLCIR)

• Extra voluntary deductions for

student loans (SLBOR) Employers collect more information from employees including hours paid (voluntary and digital)

There will no longer be two periods showing for twice monthly filers; instead, a single period will be created. All payday information will be stored in the monthly period, with twice monthly payment details managed by due dates. As you can see on this screen shot, up to and including April 2020 there are two entries per month. From May onwards there is one.

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Payments – twice monthly filers

• The PAYE calculator on the IR website helps employers and employees work
• ut how much PAYE should be withheld from wages paid weekly, fortnightly,

four-weekly or monthly. The calculator itself isn’t new, but it will now have an option to export what you’ve entered when calculating deductions for employees into an EI. This will be in CSV format to allow you to use the file upload functionality within myIR.

• There is now an option to file and pay at the same time. Employers will be

able to pay by direct debit at the time of filing (from their own bank account) as long as an authority for that bank account is already set up. Otherwise they’ll need to save the return draft, set up the direct debit bank account authority in myIR, and then go back into the return to complete the payment step.

• The due date for payment isn’t changing, but employers can choose to

file and pay together - if that works better for them.

• You will not be able to add a refund redirect link to PAYE to have credits

refunded to your agency due to the KiwiSaver component of these credits needing to go back to the employee.

• I’ll talk more about direct debit changes later in this seminar.

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Paying and filing at the same time

Other employer changes

• PAYE calculator - new option to export CSV files

and file upload in myIR

• File and pay together
• No refund redirect available for PAYE credits

Investment income includes interest, dividends, PIE income, taxable Māori authority distributions or royalties. There are a number of changes to investment income this year that will affect investment income payers and recipients. Your clients may fall into either / both

• f these categories.

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4: Investment Income

Since 1 April 2019, more frequent reporting of investment income has been voluntary, with payers being able to transition to the new reporting regime at a time that suited them. From 1 April 2020, the new reporting requirements are mandatory for all payments made to recipients from that date onwards. The end of year reconciliation statements and the monthly payment forms will no longer be

• required. Instead, there will be a summary return to be completed monthly. Reporting

investment income will only be needed for months in which a payment is made; nil returns are not required. Filing / reporting will be due by the 20th of the month following the month the income was

• paid. However the due date for the payment remains the same.

It will also become mandatory to report investment income in an electronic format, either:

• Manually uploading a csv file through myIR (the most common method)
• Completing an on-screen form available through myIR. This is suitable for low volume

filers (up to 2000 lines) who only file sporadically. You are required to enter all investor details into myIR each time you file.

• Directly through IR’s Gateway Services. This is suitable for large volume filers.

If a customer does not file electronically, a non-electronic filing penalty of $250 will apply, unless an exemption has been granted. Payers can apply for an exemption by contacting IR if they are unable to provide their investment income electronically or it would be impractical to do so. However, exemptions will only be granted in limited circumstances. Reporting will not be required for:

• nil returns (if no income is paid in a month)
• resident withholding tax (RWT)-exempt investors

Payers will need to provide additional information (where held) including the date of birth and contact details of the recipient; and details of any joint account holders. On 1 April the non-declaration resident withholding tax rate increased to 45% for interest income for customers who do not provide their IRD number to their investment income payers. We have removed the requirement to provide end of year withholding tax certificates for RWT

• n interest where the recipient has provided the payer with a valid IRD number.

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• More frequent reporting - mandatory
• Electronic reporting – mandatory
• More information required – where held
• Reporting is not required for:
• Nil returns
• RWT-exempt investors
• Non-declaration rate for interest will move from 33% to 45%
• End of year RWT on interest certificates no longer required
• Error correction processes
• Additional record keeping (NRWT)
• IR15S, IR67S and the monthly payment forms (e.g. IR15P)

ird.govt.nz/investment-income

Payers - Reporting changes

Error-correction processes will be improved. Additional record keeping will be required for the payment of non-resident withholding tax (NRWT). End of year reconciliation statements (IR15S and IR67S) and the monthly payment forms (e.g. IR15P) will no longer be required. The final reconciliation statements need to be filed by 15 May 2020. You can learn more at ird.govt.nz/investment-income

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Here’s a summary of the key dates as we transition to the new reporting requirements.

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Payers – transitioning to new reporting

March

March 2020 All payers that have not already voluntarily opted into the new reporting requirements, will be automatically switched to the new electronic filing frequency on our system.

April

1 April 2020 New reporting requirements become mandatory. 1 April 2020 IR will no longer issue certificates of exemption from RWT. Instead see the RWT exemption register. 20 April 2020 The final periodic payment returns are due for the period ending 31 March 2020. 20 April 2020 Any tax payable on the final reconciliation return for the year ended 31 March 2020 is due.

May

15 May 2020 The final reconciliation return for the year ended 31 March 2020 is due. Annual certificates for the year ended 31 March 2020 are due. The only exception is for NRWT royalties, which has a 31 May due date. 20 May 2020 Payers must provide annual certificates to recipients that have earned more than $50 interest in the year up to 31 March 2020. 20 May 2020 The first summary return under the new reporting requirements for the period ended 30 April 2020 is due.

Key dates

For payers joining the new reporting regime from 1 April 2020 For payers of investment income who did not adopt the new reporting regime early (prior to 1 April 2020) we have moved them across automatically. This does not affect their reporting for the 2019/2020 year.

• As usual they will need to file annual reconciliation returns (IR15S and IR67S) for the

2019/2020 year, accompanied by RWT and NRWT certificates (eg IR15 and IR67).

• Current electronic and manual filing methods apply. For electronic filing, please use the
• ld text style file format.
• Going forward for investment income payments made from 1 April they will start the new

reporting frequency – first return due on 20 May. For payers who have already started the new reporting If a payer voluntarily adopted the new rules prior to 1 April 2020, for the 2019/2020 income year they will have a combination of reporting requirements:

• Annual reconciliation returns (IR15S and IR67S) - for payments made from 1 April 2019

until the date they transitioned to the new regime. These returns:

• will only contain part-year information.
• can be filed any time after the date they transitioned but must be filed by 15

May 2020.

• must be accompanied by the RWT and NRWT certificates (e.g. IR15 and

IR67).

• current electronic and manual filing methods apply to the annual

reconciliation returns and certificates. For electronic filing, please use the old text style file format. Tax certificates will still need to be issued to the payees for payments made prior to the transition date.

• These can be provided at any time before the due date.
• Where you do not hold a valid IRD number for your customer, you will need to issue a

full-year tax certificate to the customer. Note: If you issue a “full year” tax certificate to your customers, you will need to ensure that:

• You do not submit the full year information to Inland Revenue – this will

result in duplication of income for your customers

• The customer is aware of how that information has been reported to IR – i.e.

split between a) the year-to-date up to the transition date and b) from that date of transition onwards.

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Payers – transitioning to new reporting

have adopted the new rules prior to 1 April 2020 you:

• need to complete annual

reconciliation returns for the periods before you adopted the new reporting (and require RWT and NRWT certificates)

• start the new reporting frequency

for the periods after you adopted the new reporting

• use current electronic and manual

filing methods have not adopted the new rules prior to 1 April 2020 you:

• will have been moved into the

new reporting system by IR

• need to complete your annual

reconciliation returns for 2019/2020 (as usual)

• start the new reporting

frequency – for payments made from 1 April. If you:

New reporting requirements – for payments made and tax withheld after the date the payer joined the new reporting regime, they need to use the new reporting requirements. FOR EXAMPLE: If you onboarded to the new reporting regime in October 2019:

• You complete Annual reconciliation returns for payments made from 1 April

2019 to 30 September 2019

• You file under the new regime for 1 October 2019 to 31 March 2020
• You continue the new reporting from 1 April 2020 onwards

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RWT Exemption Register IR will now no longer issue RWT certificates of exemption. Instead, we’ve introduced an electronic RWT exempt status register.

• Payers will no longer receive certificates from payees, and will need to check the

register on the IR website to confirm a payee's RWT-exempt status.

• Those customers who currently hold a valid certificate of exemption from RWT, won’t

need to do anything, as they will automatically be placed on the register. However, customers (other than charities) who are exempt from RWT under another Act, other than the Income Tax Acts, may need to apply to IR for an exemption in order to show

• n the register and for their exemption to be valid.
• Charities registered with the Charities Commission will be added to the register. IR will

do this. The register:

• is populated automatically by Inland Revenue
• identifies customers only by their IRD number
• is searchable by the IRD number, exempt status (active, cancelled, revoked or end-

dated), exemption end date (if applicable) and when the information was last updated

• may be downloaded as an Excel file with all the data contained in one worksheet - if

you have performed a specific search (e.g. by IRD number) the exported rows will match your search criteria

• is updated overnight every business day (Monday to Friday) providing you with near

real-time information. You can access it at ird.govt.nz/rwt-exemption.

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Electronic Exemption Register

• IR no longer issues RWT

certificates of exemption

• www.ird.govt.nz/rwt-

exemption

• Exemptions under ‘other

acts’ (not administered by IR) may need to apply

• Can be exported to Excel.

Payers should update:

• RWT exempt status data on their systems
• Processes (e.g. not accepting certificates)

There are some important things for your clients who are recipients of investment income to know and do:

• If they haven’t already they need to provide their IRD number to their investment

income payer (eg their bank) to ensure they’re on the right tax rate and to avoid the non-declaration rate.

• We will split any investment income reported for a joint account equally across all the

account holders who have provided their valid IRD numbers to their payer. They can change this allocation through myIR on our website (or on their income tax return). [They will have to do this individually. From a tax agent perspective, if they were acting for both, they could change both. If they were acting for one, they could only change it for that one. The joint account holders will need to communicate with each

• ther to get the others to change their allocations.]
• If they have an RWT exemption certificate, they won’t need to show it to their payer

as their IRD number will be included on the new RWT exemption register.

• However, if they have RWT exempt status from an Act not administered by IR they

may need to apply to us to be on the register. To do this go to our website (ird.govt.nz/rwt-exemption) and complete the IR451 form.

• myIR provides information on their investment income.
• Clients need to ensure they are on the correct Prescribed Investor Rate (PIR). We’ll

talk more about PIRs shortly. You’ll see reference to account identifiers. The best identifier is the bank account number so we know exactly which account is referred to.

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Recipients of investment income – key things

Key things to know and do:

• Provide their IRD number to their investment income payer to:
• make sure they’re on the right tax rate
• avoid the 45% non-declaration rate on interest
• Investment income will be split across all the joint account

holders (recipients can change this)

• No need for an RWT exemption certificate (if they have one)
• myIR provides information on their investment income.
• PIR rates and communications
• Account identifiers

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5: Prescribed Investor Rates

In mid-2019, we started to issue letters to customers advising if they were using the incorrect Prescribed Investor Rates (PIR). As part of Release 4, we will now also contact Portfolio Investment Entity (PIE) funds if we believe that a customer is using the incorrect PIR based on the information we hold. This includes KiwiSaver Scheme providers.

• After a PIE files their end of year certificates, bulk notification reports will be compiled

and a downloadable file made available in myIR for PIE’s (or their tax agent) to

• extract. This will advise them of the correct PIR they should be using for their

customers, if the rate is different from what was applied on the previous years’ PIE certificate.

• 327 PIE accounts are linked to tax agents. Of these, 228 have mail being redirected –

this means the notification advising there is a PIR report to download in myIR will be sent to the tax agent.

• If there is sufficient information on the customers account, we will calculate their PIR.

We are working with PIEs around the implications for them and their systems.

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IN CONFIDENCE

Prescribed Investor Rates (PIR)

• IR is proactively contacting Portfolio Investment Entities (PIEs) to

change customers’ PIR if it is incorrect

• PIR notifications sent to PIEs.
• PIR notifications sent to customers
• Squaring up PIE income at the end of each tax year using an investor’s

correct PIR is likely to be effective from the year ending 31 March 2021 PIEs:

• Will also receive the

information and instruction to change the rate

• May be contacted by their

customers to change it again Income tax clients:

• Continue to receive PIR

notifications

• Don’t need to do anything…
• …unless they disagree and want

to contact their PIE to change it Implications for:

Hi, my name is Catherine Simpson and I’m a Transformation Account Manager at Inland Revenue, primarily working with individuals, families, and the

• rganisations who support them. I’m going to take over from Trish briefly to talk

about a couple of changes around Working for Families Tax Credits. The changes in Release 4 are enhancements for customers which will help with compliance and to ensure customers receive their correct entitlement throughout the year, instead of at the end of the year.

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6: Working for Families Tax Credits

Instalment arrangement using WfFTC entitlement

• Customers with a WfFTC overpayment or debt from a previous period can choose to set

up an instalment arrangement that uses part or all of their weekly or fortnightly WfFTC

• entitlement. This will be available for customers both in their myIR account and over the
• phone. Being able to have a set amount deducted from their weekly or fortnightly

payments will help customers stay on track with minimal effort.

• This option will only display in myIR if the customer only has WfFTC to pay, which you

can see in the screen shot here. If arrears exist for other tax types this option will not be available.

• You will be able to access this also on behalf of linked clients should you need to do this
• n their behalf.
• Like all instalment arrangement requests, the confirmation letter will be sent directly to

your client, but will be visible to you in myIR. 30 days to pay

• WfFTC customers (principal caregivers or partners) whose income tax returns go on hold

because the other has an extension of time will have 30 days from the date the required information is received by IR to pay any balance owing (as long as they meet their filing requirements). This reduces penalties and interest for them and means they don’t need to contact IR to have them reversed. If their assessment results in a credit, the effective date will be, eg, 7 February. The 30 days will be given regardless of if the relationship between the principal care giver and their partner was for a full or part year. I’ll finish with a quick update on automatic offsets. Currently, any income tax credit calculated for the principal caregiver is automatically offset to any WFFTC debit within the same tax

• year. We had previously indicated that we will be extending the automatic offset across the

family unit, which would include the partner not just the principal caregiver. This change is now being deferred until a later date, we’ll let you know when it is likely to occur. I’ll now hand you back to Trish.

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Working for Families Tax Credits

• New entitlement instalment arrangement option.
• Change in payment due date

Based on what we’ve heard from our student loans customers, we’re making some improvements to help resolve some of their pain points.

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7: Student Loans

From April, student loans will be fully administered in our new system. The way this information is processed and stored will become more streamlined and increase accuracy. Here we’ll have a look at some of the key changes.

• You will be able to bring your clients’ student loan accounts into your workspace, if you

are linked. This means you will have full access to your clients’ loan account in myIR and the ability to access and update the same services as your client.

• Loan repayments will be processed faster and you will be able to keep better track of

your clients’ student loan balances in myIR.

• Increased automation when a student loan has been fully repaid will result in faster

cessation of loans with faster refunds of any overpayments.

• There will be greater clarity of the overall loan balance, including assessments that are

upcoming and/or overdue, travel dates (date a client leaves or returns to New Zealand), and whether their repayment obligations change if they move overseas for more than 183 days.

• Currently, customers receive a letter when they are close to repaying their loan.

Employers will now also be notified if they have an employee with a student loan. Customers will continue to receive a letter when their long term loan balance drops below $1000 and employers will receive a letter when the loan will be repaid within the next three months (based on previous repayment deductions received). This will enable employers to deduct just the right amount then update the tax code (so it’s non SLS), reducing overpayments. Note that the employer notification will only take place where the borrower has one employer (as it is complex to get right with more than one).

• To align to other account types, due dates for student loan assessments and

reassessments will change from 60 days to 30 days after the due date. If people have standard interims, or standard End of Year payments those due dates remain the same, but for example if someone has a significant under-deduction assessment resulting from underpayment through salary and wages - and not collectable via an employer, then the assessment will have 30 days to pay which aligns with tax due dates.

• There is currently a very low awareness and up-take of the entitlement to reduce

repayments from salary and wages, and this could be causing hardship for our

• customers. For example, borrowers in full-time study, earning under the annual

repayment threshold but over the pay period threshold in a summer job, are entitled to a

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Student loans - key changes

• Can bring student loan account into workspace
• Faster account cessations when loan fully repaid
• Greater clarity of loan balances
• Employers notified where possible when loan close to being paid off
• Due dates for assessments/reassessments change from 60 to 30

days after due date

• Identifying customers eligible for reduced repayment deductions
• Interest no longer charged and written off for New Zealand based

student loans borrowers

• Early filing – student loan assessment issued

nil deduction rate. Customers who may be eligible for a reduced repayment rate will be proactively identified and directed to the application in myIR.

• Interest will no longer be charged and written off for New Zealand based

student loans borrowers.

• For New Zealand based customers, if someone files early (for example,

because they are going overseas, or shutting down their business) we can issue the assessment of their loan balance then rather than wait until the end of the year.

38

• Customers calling on New Zealand numbers will be able to make payments 24/7

through SPK2IR. This won't initially be available on the international tollfree numbers.

• The adjusted net income threshold will be reduced from $1500 to $500 for student

loan customers. The adjusted net income threshold applies to non-salary and wage income, to work out student loan assessments when a return of income is filed, or when an income tax assessment is automatically issued. This is different to the student loan annual repayment threshold which is typically adjusted each tax year, and will be $20,020 from 1 April 2020. The annual repayment threshold is apportioned to pay period thresholds to determine repayment deductions from salary or wages.

• The student loan repayment holiday has been renamed to “temporary repayment

suspension” to make it clearer that this is a temporary break.

• For customers who move overseas for more than 183 days - to make it easier to

understand that the suspension of their repayment obligations is only temporary, the Repayment Holiday will be renamed to Temporary Repayment Suspension. There will also be more communication about this service to encourage customers to apply, and notification when the suspension is due to expire.

• Repayment deductions will be allocated by payday rather than on the 15th.
• If there is no bank account loaded against the student loan account but there is one for

the income tax account, this bank account will be added to the student loan account for any refunds we make.

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IN CONFIDENCE

Student loans - key changes

• Can make payments 24/7 through SPK2IR (calling from New Zealand)
• Adjusted net income threshold reduced from $1500 to $500
• Repayment Holiday renamed to Temporary Repayment Suspension
• Serious illness or disability – IR can treat as “overseas – interest free”
• Repayment deductions allocated by payday rather than 15th
• Income tax bank account details used if no refund account provided

Now let’s see how this will look in myIR. On the left is the new view of a normal student loan borrower who is based in NZ. The majority of loan borrowers have deductions from salary and wages and splitting transactions into periods was confusing for them. The Summary screen has been redesigned based on feedback from student loan borrowers. It will now clearly show their total loan balance, any balance owed now, how to make extra repayments and if interest is being charged and at what rate. Their salary and wage deductions go straight to their consolidated loan balance. They can also see a breakdown of the transactions by clicking ‘View transactions’. When clicking ‘View transactions’ from the client’s SLS account you will see the simplified transaction view for customers. From this screen you can click the Export button which will

• pen a spreadsheet of the displayed transactions on screen.

Whereas borrowers can see all the transactions that make a difference to their account (ie increase or decrease), as tax agents and bookkeepers you will be able to see even more detailed transactions that the customers don’t see.

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Student loans – NZ customer view in myIR

• From the Reports section of the Tax preparer tab you can use the ‘All client transactions’

report, select the SLS account and retrieve a similar view to the backend transactions on the account.

• You will have an ‘Impact’ column which shows whether it’s a transaction that impacts the

long term loan or period.

• Your view will include the repayment deductions as well as loan interest calculated and

then written off.

• Your view will also be period based. For example:
• the customer SLS account view will include all transactions that fall into the

date range

• However the intermediary version uses ‘period’ in its date range filter, like all

the other transactions reports. In this screenshot, the customer view includes a transfer of $37.95 between 2019 and 2020 periods due to the effective date of the transaction falling in the date range. However, the intermediary view which operates off period, only shows the 2019 transaction.

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Student loans – NZ customer view in myIR

This is an example of what the SLS account will look like for a client who has interim repayments and amounts overdue. The total loan balance is also still prominent. To view the interim assessment and assessment calculations for this customer, you need to click ‘View assessments’ under the I want to… menu. For simplicity for the majority of borrowers there is no Period tab for the SLS account. The assessments screen for this customer will show the breakdown for each period including payments, penalties and the balance. We won’t be raising student loan penalties for periods prior to 1 April 2013 (except in cases of fraud). That means if we get new information that a borrower went overseas in 2008 and returned in 2011, we will simply add interest for that period. If they had instead returned in 2015 we would charge interest from 2008 – 2012, and raise assessments for the years from 1 April 2013.

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IN CONFIDENCE

Amounts overdue and interim payments

The transactions in the customer’s account will show like this, again a more simplified version

• f what you can retrieve.

Repayment deductions will show as a single transaction as they go straight onto the overall loan balance, rather than the two transactions that are shown today (where they go into the period and out to the overall loan). Customers will see their repayments reflected in myIR each pay day. The other important point to note is that we have converted student loan transactions from 1 April 2006 onwards. Anything prior to this date will simply show as ‘Opening balance’ and ‘Opening interest’ on the account, like the last transactions on this view. Again, if you click the export button from here it will produce the simplified transaction view to match what is shown on screen. The tax agent view, using the All client transactions report from the Agency reports section of the Tax preparer tab, will also be able to retrieve transactions dating back to 1 April 2006 for the full loan period – even though it’s limited to 24 months for every other tax type. In general, the customer transactions view will have no assessment transactions, no loan assessed transactions and there is no ‘impact’ column – it is much simpler to understand for the average loan borrower who doesn’t need an annual assessment.

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Transactions

The repayment calculator will be also be available in myIR to help customers calculate how quickly their loan will be paid off based on their current income and either with or without additional payments. The calculator will populate with the customer’s loan balance, current year income and student loan interest status to assist the customer in completing the calculation.

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Repayment calculator

Customers will be able to see their travel movements in myIR. This includes any arrivals, departures and associated travel dates. If they see border movements are missing they should send us a secure email to let us know. There will be a new interest status calculator so customers can see the impact travel could have on the interest status of their loan. Generally people think that they need to be going

• verseas for six months before interest will apply on their loan and back here for 6 before it
• stops. However, the rules are more complex as you will need to be in New Zealand for at least

32 days in any 183 day period to remain a New Zealand-based borrower. By exposing the rules in the form of a calculator, customers will be able to check their plans and make adjustments if necessary.

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myIR changes - travel movements

Other enhancements are being made to myIR to improve the management of loans. A key focus is simplifying the information available in myIR, as well introducing some new functionality that has previously been managed through paper or email channels:

• The student loan account will be optimised for use on mobile phones, tablets and

desktop.

• Customers will be able to update their Alternative Contact Person (ACP) in myIR.
• Customers will have the ability to make payments within myIR and make extra
• payments. They will be able to pay using the direct debit option from Australia, UK,

Europe (SEPA), US and Canada.

• Customers who are applying to be overseas and interest free will be able to do this

through a web request in myIR, and also advise us of their worldwide income.

• Customers will be able to set a preference for what to do on any overpayments on their
• loan. It will automatically default to staying on their loan, but allows them the option of

paying off debits in other tax types, refunding any credit or transferring it to their KiwiSaver.

• Customers will be able to apply for a reduced rate on their salary and wages through
• myIR. Previously, some of this functionality was in the old myIR and some wasn’t (for

example, when people can't afford the 12% repayment rate from their salary and wages). Now customers will be able to apply for all of these through myIR. Where possible, fields

• n the application will be prepopulated with the information we hold to reduce the effort

involved.

• Customers based overseas and with non-salary and wage income will also be able to

apply for hardship within myIR at the customer account level.

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IN CONFIDENCE

Other myIR changes for student loans

• Optimised for mobile
• Alternative contact person
• Pay using direct debit from NZ, Australia, UK, Europe, US and

Canada

• Apply for overseas and interest free
• Set overpayment preference
• Apply for reduced repayment rate – overseas based customers

This is a draft view of the new student loan statements. The idea is that they are easy to read, reflect content that is shown in myIR, but are just a point in time summary. You will also see more tailored statements and notices of assessments, such as messages in the final year of a loan to help ensure the student loan customer pays the right amount.

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Student loan statements

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8: KiwiSaver

There are a number of changes coming up for KiwiSaver members and employers. From April 2020, KiwiSaver will be fully administered in our new system. The way core KiwiSaver information is processed will become more streamlined and involve less manual handling, resulting in more accuracy and a reduction in time. If you need access to a client’s KiwiSaver information you will need to be set up as a nominated person. There are some changes that will benefit your clients who are KiwiSaver members:

• Voluntary member transfers between Scheme Providers will now be required to be

completed within 10 working days, instead of 35. This change will allow more visibility

• f where funds are and provide reassurance that their investment is being managed

efficiently.

• The provisional period for new KiwiSaver members that have been automatically

enrolled will be reduced from three-months to two-months. As many members are unaware of the current process, a banner will be displayed on the member’s myIR account for the duration of the holding period to explain to members what this means.

• Employer contributions (both compulsory and voluntary) will be government

guaranteed, allowing contributions to be passed to Scheme Providers as soon as information from an employer had been filed (what is guaranteed is what the employer submits on the EI).

• Interest calculations on KiwiSaver employer contributions and employee deductions

held by Inland Revenue will be calculated from the pay date the employer has reported.

• The three-month grace period for an individual to gain New Zealand residency after

being invalidly enrolled in KiwiSaver will be removed. If a person does not meet residency requirements, their account will be closed immediately. However, they will have the opportunity to re-enrol if, and when, they gain New Zealand residency.

• People with qualifying life-shortening congenital conditions will be entitled to make a

full or partial withdrawal of their KiwiSaver funds before the retirement age of 65, which they are currently unable to do. We are working closely with KiwiSaver providers on the upcoming changes.

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KiwiSaver

• KiwiSaver administered in our new system
• Voluntary transfer period reduced from up to 35 to 10 days
• Provisional period for new members reduced from 3 to 2 months
• Employer contributions government guaranteed
• Interest calculations calculated from pay date reported by

employer

• Three month residency grace period will be removed
• Members can make full or partial withdrawal before turning 65

(life-shortening conditions)

So what does it mean for employers?

• There will be improvements to the onboarding process for new employees

which will reduce confusion and repetition of information:

• Employers will be required to supply an employee’s first and last

name when completing an employee onboarding request, along with the name the employee will have displayed on the Employment Information return.

• As mentioned earlier, the KiwiSaver enrolment form (KS1) and

the new employee details form (IR346) will be combined into one new ‘Employee Details’ section, therefore there will be less repetition of information employers provide.

• We’ve changed the KiwiSaver status details employers need to

provide when they onboard a new employee to incorporate details you used to have to provide in the KS1.

• As a one-off, employers will need to advise us of any income that

will be received by a new employee that is exempt from KiwiSaver contributions.

• Employers will see a change in how often we are contacting them to change

an employee’s KiwiSaver deductions.

• They will also receive new notifications specific to KiwiSaver contribution

rates and enrolments.

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IN CONFIDENCE

KiwiSaver impacts for employers

• Improved onboarding process for new employees
• Supply employee’s first and last name
• KS1 (enrolment) and IR346 (new employee details) combined

into one “Employee Details” section

• KiwiSaver status collected for new employees, not existing

employees

• One-off, advise of any income received exempt from KiwiSaver

contributions (new employee)

• Frequency of contact with IR will be different
• New notifications

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9: Changes to E-File

The new income tax return fields for research and development tax credits, ring fencing rental loss and AIM shareholder tax credits will be available in E-File for you to record this information where applicable. Investment income for clients will not be on the Summary of Earnings. If your client hasn’t provided you this information you can check their income profile in

• myIR. Any returns in myIR will prepopulate this information where it is known.

Just a quick reminder that over the next 12 months, the E-File service is going to be replaced with a number of other Inland Revenue service offerings. We are currently working closely with all the existing E-File software providers as to when these new service offerings will be made available to you. There is likely to be minimal impact for you and your clients. In fact, overall it should be an enhancement on your current digital experience with Inland Revenue.

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E-File

• E-File will be updated to include the required new

keypoints for:

• R&D tax incentives
• Residential rental income
• AIM tax credits
• E-File Summary of Earnings (SOE) will not be updated to

include investment income information that is on the Summary of Income (SOI)

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10: Other changes

• Following feedback that the 'My details' tab in myIR is confusing, we’ve

changed it back to ‘Names and addresses’. The registration details that used to sit in this tab are now housed on the Summary tab (this will be the same for all products and accounts).

• Customers can also submit an application for financial relief through myIR.

Tax agents with a customer master link will also have access to this service, to submit an application for debt relief on behalf of a client.

• The existing service to update employee details will be broken down into

smaller sections, making it easier to navigate the specific details you want to

• update. This is shown on the bottom image here.

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Other myIR changes

The Agency activity report 'Client refund redirect' tab will be renamed to 'Client redirect changes’. This section will now capture any changes to the mail redirect

• n an account link made by you or your client – as well as any refund redirect

changes. The client list report has also had some updates:

• Now that everyone will be on the same filing frequency for investment

income, these sections have been removed from the report.

• The ‘Other system compliance' section has been removed as the PAYE and

SLS debt will be combined into the other debt/return compliance section. The 'Debt under collection' column has been renamed 'Total linked debt’

• The PAYE section will now show 'Payment option' eg. Monthly or twice

monthly instead of filing frequency.

• There is a new student loan section to show any linked clients with interim

repayment obligations.

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Reports changes

• Agency activity report
• Client redirect changes
• Client list report
• Filing frequency for investment income removed
• PAYE and student loan debt no longer under ‘Other

system compliance’

• Total linked debt
• PAYE payment option instead of filing frequency
• Student loan section – interim assessments

Direct debits in myIR You and your clients can continue to pay us by credit card, debit card and online

• banking. But, after Easter 2020, if you choose to pay by direct debit in myIR from a

new direct debit bank account a direct debit authority will need to be set up.

• This replaces the current process where you confirm you have signing authority
• n a bank account by ticking a box when you set up the payment.
• Setting up the authority is a one-off process and will need to be set up separately

for each new bank account before a direct debit payment can be made.

• You’ll no longer be able to initiate a direct debit payment for your client to

approve in myIR. If your client wants to pay us by direct debit, they will need to set up an ‘authority’ for their own bank account in myIR.

• You can continue to pay by direct debit for a client if you have signing authority
• n the bank account being used (eg. it’s your agency’s own bank account) after

you have set up the authority in myIR.

• These changes are taking place to ensure that direct debits are properly

authorised by the bank account owner.

• When anyone is filing a return or setting up an instalment arrangement and

wanting to pay by direct debit – they will be prompted to set up the authority if it is not already held – this will mean saving a draft of the return or instalment arrangement, completing the authorisation, before continuing the return or instalment request

• Instalment arrangements can now be initiated without direct debit – this means

you can set everything up in myIR, for a client to separately arrange payment e.g. setting up an automatic payment through online banking. Once the arrangement has been agreed by IR, a letter will be sent to your client to advise all the details with their payment options and an AP form. As summarised earlier, there have been some changes to 'My pay tax' on online

• banking. New payment options for:
• EMP: employer payments
• EQU: income equalisation

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Payments

• Direct debits in myIR
• Removal of direct debit payments with client approval
• ‘Authority’ required when bank account added by

customer

• Instalment arrangement without direct debit
• Changes to “my pay tax” – banking online (new and

removed options)

• Refunds issued by direct credit – no more cheques
• Over the counter payments at Westpac

• ERA: environmental restoration
• RDI: research and development

At the same time we have removed FBI and FBA, ICA, MAC, CSE, KSE, KSR, PAY, SLE and SSC. DED will remain. Refunds will be issued by direct credit – no more cheques. And on that note, you will have heard a fair bit about IR no longer accepting cheques from 1 March 2020. This is now well in place. There are also some changes to over the counter payments at Westpac:

• Customers can choose to pay their taxes over-the-counter at a Westpac

branch even if they don’t bank with Westpac. From 1 July 2020, all payments at Westpac must be accompanied by a barcode. The barcode is a more reliable way of passing your details to Westpac and will prevent your payment going to the wrong place in the account, or potentially even the wrong person’s account.

• We are adding barcodes to notifications where we’re requesting you to make

a payment. If you misplace your barcode, you can generate one using the barcode generator on our website. You will need your IRD number, the tax type and the period of the payment. You can then either print it off or show it to Westpac staff on your phone.

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We’ll just briefly look at how you add a bank account that you can use to pay by direct debit:

• Note: If the bank accounts requires multiple signatories before withdrawals

can be made, you cannot use it to make direct debit payments.

• You can set up an authorised bank account for Direct debit payments under

‘Logon settings’>’Direct debit authorities’.

• Here it will show any direct debit authorities you have already set up to pay

IR (screen shot 1)

• If you want to be able to make payments by direct debit, but the bank

account is not showing here you will need to set this up. You will be asked to complete all your details including the bank account number and the name on the bank account.

• Before completing the direct debit authority you will need to read and

confirm the declaration.

• Once the direct debit authority has been completed, you will be able to use

this bank account to make direct debit payments to IR

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Setting up Direct Debits

• 1. Under logon

settings go to ‘Direct Debit authorities’

• 2. Complete details under

‘Set up Direct Debit authority ‘

• 3. Confirmation and

declaration

The income equalisation scheme is a mechanism used by eligible customers to even out fluctuations in income by spreading their gross income from year to year. The types of businesses that are eligible for income equalisation include:

• Farming, agriculture, and horticulture
• Fishing, which also includes rock oyster farming, mussel farming and freshwater

farming, and

• Forestry

Income equalisation was previously managed manually, but has now moved into our new system which will make it a lot easier for customers and yourselves to apply and access funds. Some of the benefits of having it in our new system includes:

• You / your client will have visibility of Income equalisation (EQU) accounts in myIR
• Income equalisation will be automatically linked as part of being linked for income

tax

• You / your client will be able to pay into their EQU account by direct debit
• Withdrawals will be paid by direct credit instead of cheque
• Deposits can simply be made – there are no forms
• The paper IR155 (Income equalisation deposit/refund form) will be removed and

replaced with a digital request in myIR So in a nutshell, income equalisation customers will find it much easier to deal with us, contribute and access money much faster.

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Income Equalisation

• Visibility of Income equalisation (EQU) accounts in myIR
• Automatic linking with income tax
• Ability to pay by direct debit – no more cheques
• Withdrawals will be paid by direct credit – no more cheques
• Simpler deposits - no forms
• No more paper deposit/refund forms
• Register in myIR

This image shows what the summary tab looks like. You / your clients will be able to see their account balance, filing frequency and recent activity.

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Income Equalisation

Before we finish, I’ll just quickly go over the next steps and where to go for more information.

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11: Next Steps

Over the last three years we’ve asked you to deal with a lot of change. We know that takes work and effort. Releases 4 and 5 will bring additional changes. To ensure they are implemented successfully we need your support, engagement and leadership. We know we need to do some things differently to achieve that. To help we will: Focus on tax agents, intermediaries and software developers A networked team from across Inland Revenue will work to ensure we have the right support in place to work alongside you for Release 4 and beyond. The network will provide clear lines of sight and accountability for working with tax agents, intermediaries and software developers. It will help people across Inland Revenue understand that you are a key to delivering Releases 4 and 5 successfully and be clear about exactly what’s required to achieve that. We want to build a partnership culture with you and gain your feedback early to support successful delivery. Our networked approach will also provide visibility of any issues to our executive leadership team so that we can seek their guidance and support to resolve them. Creating this network will help to ensure strong co-ordination and collaboration within Inland Revenue. This will help you to have confidence your views are

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How we will work with you

• Focus on tax agents, intermediaries and software developers
• Tax agent cohort
• Account Manager support
• Top issues and solutions page (ird.govt.nz/solutions)

being heard and responded to in a cohesive way. Tax agent cohort We have established what we’re calling a tax agent cohort with a representative cross-section of tax agents. We envisage the cohort as a touchstone group we can work with to:

• develop roadmaps and strategies for the future
• test concepts and ideas with
• seek detailed feedback on the solutions being designed, and
• ask for direct feedback from after go-live on how things are going and

ensure the right issues are being prioritised for fixes. The cohort will provide us with first-hand insights and feedback, and the cohort will have an early view of design, with opportunities to influence it and provide direct feedback. Account Manager support We are providing more training to the Account Managers in our Community Compliance team for Release 4. This will enable us to better support you as we embed the new changes. Top issues and solutions page We will continue to update the Top Solutions web page regularly. We’ve had great feedback about the site and usage is very high. We are looking to streamline the look and feel of the site and archive older content to make it easier to use and easier to find information.

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We’re in the final stages of our journey to move all our web content to our new

• site. In the next few months, when this is complete, we will decommission, or

turn off our heritage website. We’ve listened to and involved tax agents We’ve done a lot to get us to this point including re-writing and testing content

• n the new site. We’ve also listened to and acted on the feedback tax agents

gave us about our new site when it went live in Release 3. Specifically we’ve:

• applied a clearer structure and made it easier to find content
• moved from a task to a product focus for all content
• included left hand navigation, related news and dates, and key information

panels across product and topic pages

• embedded guides and fact sheets on relevant pages, and
• filled gaps in tax on income and Working for Families content.

We continue to involve tax preparers in the development and testing of content

• n our website.

Tax Technical site We’re working to make available a new and improved Tax Technical subsite to help tax preparers find tax technical answers more quickly. This site will be available on, but will operate separately from, the main Inland Revenue website . The site will be released in stages with a beta version available by late March. We urge you to visit the site and familiarise yourself with the layout, features and

• content. Feedback is also encouraged, which you can provide via the ‘feedback

tabs’ on the site. This will help us refine the site ahead of the first release; we’re

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More information – website

• Moving all web content to our new site in time

for our heritage site to be decommissioned.

• New tax technical site – beta version available

late March

• All KiwiSaver content now on our core site.

KiwiSaver subsite to be decommissioned 1 April.

targeting late April to make this live. KiwiSaver site to be decommissioned in April

• Until now all KiwiSaver information has been housed on a separate subsite -

kiwisaver.govt.nz. Last September we started beta testing re-written KiwiSaver content on the core Inland Revenue website. We’re confident the material we tested meets the needs of our customers. As a result we’re looking to decommission the KiwiSaver subsite from 1 April 2020.

• We encourage you to visit the new content on our main website and set up

new links or favourites to content you frequently use or visit. Redirects will also be in place once the old KiwiSaver subsite is decommissioned, to help you find the KiwiSaver content you’re after.

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More information

• Visit Top Solutions for tax intermediaries web page

ird.govt.nz/solutions

• Visit Tax Technical website
• Watch webinars On Demand at ird.govt.nz/webinars
• Read IR updates and information to help you get started
• Sign up for one of our newsletters – including Agents Answers
• Get in touch with your Community Compliance Account Manager
• Connect with us on: Twitter, LinkedIn, Facebook

There are a number of places where you can get more information.

• Our Top Solutions for Tax Intermediaries web page remains a key place for

you to learn about new myIR changes, issues, and information that may affect tax intermediaries.

• You can visit the tax technical website as discussed in the previous slide.
• Previous webinars are still available on our website, if you want to look back
• n some of the other topics we’ve covered.
• You can read newsletters and other information issued by us to help you

prepare for, and adjust to, the changes.

• You can also contact your Community Compliance Account Manager.
• And of course we’re sending out updates and links to useful information

through on social media so do connect with us on Twitter, LinkedIn and Facebook.

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Thanks for your time