TAX PAYMENTS DUE

The third instalment of 2004 provisional tax is due on 7 March 2004 for people who have a March balance date.

As 7 March 2004 falls on a Sunday, all payments received on or postmarked 8 March 2004 will be treated as received on time.

Terminal tax is due on 7 April  2004 (for taxpayers with no tax agency arrangement with the IRD, terminal tax was due two months earlier on 7 February). 

If you think you may have something to pay but you are not sure, call IRD on 0800 377 774.

If you are a corporate (with a group turnover of more than $100 million or industries where specific legislation applies) call IRD on  on 0800 443 773

 

TAXPAYERS SHOULD CALL IF TAX RECORDS LOST IN FLOODS

IRD has advised that  taxpayers should contact the department as soon as possible if they have lost their tax records in the recent flooding in the central North Island.

Colin MacDonald, General Manager Business Development and Systems, says that IRD will approach each situation on a case-by-case basis.

"We are also aware that there may be some taxpayers who have tax due dates coming up. If they have concerns about meeting those dates it is important that they contact us as soon as possible, before the payments are due," says Mr MacDonald.

Inland Revenue's 0800 numbers are available weekdays from 8am to 8pm and from 9am to 1pm on Saturdays. For personal tax enquiries please call 0800 227 774, and for business enquiries, call 0800 377 774.

TAX INFORMATION FOR FARMERS AFFECTED BY THE FLOODS 

Some farmers may now be facing extreme financial pressure due to the recent floods that recently hit the Lower North Island. The following  will answer questions about aspects of taxation as well as other programmes administered by IRD, including Family Assistance, Student Loans and Child Support. 

 

AREAS WHERE IRD CAN PROVIDE IMMEDIATE ASSISTANCE

The following is a list of areas in which Inland Revenue may be able to help in these unique circumstances.

 

RECORDS

Some farmers have lost all their paper and electronic records, while others cannot access their computers.  Such farmers should contact IRD as soon as possible if they have lost their records.

 

LATE PAYMENT

IRD understands that it will take some time for farmers to be in a position to meet their tax obligations and will approach each situation on a case-by-case basis.

If any farmers are unable to make their tax payments in full by the due date, contact IRD and discuss the options available.

If farmers have tax outstanding with the department, and do not make payment, penalties, and in some cases interest, is charged. However, in most cases, it is possible to set up an instalment arrangement for payment. Where an instalment arrangement is agreed to prior to the tax becoming due there will also be a reduction in the initial penalty. Temporary or permanent relief from the payment of tax may also be a possibility.

 

PROVISIONAL TAX ESTIMATION/ RE-ESTIMATION

Some farmers are provisional taxpayers. If they are, they can estimate their provisional tax, based on their individual circumstances. This can be altered up or down at any time until the date your third provisional tax instalment is due. If their business income is down they could choose to estimate their provisional tax to reduce their payments or, if they have already paid more than they expect to be liable for, a refund will be possible. Interest may be calculated on any under or overpayments once the tax return for that year has been assessed.

 

GST REFUNDS

If farmers are expecting a refund, and urgently need the money,  contact IRD on 0800 473 566.

Farmers expecting a GST refund may wish to consider altering their taxable period to either a two or one month return. This will allow them to receive refunds at more regular intervals. It should be noted that any change will be effective from when the department actions their request so they should advise us as soon as possible if they wish to do this.

However, if they are expecting to have a payment to make, and are unable to do so in full, please contact us so that we can set up an instalment arrangement.

 

INCOME EQUALISATION DEPOSITS/ WITHDRAWALS

IRD has declared this an adverse event for the purposes of Section EI 4 (4) of the Income Tax Act 1994. This will enable taxpayers who have made deposits to the Income Equalisation Scheme to have these refunded within six months of the date of deposit.

The Adverse Event Income Equalisation Scheme is also available to defer income tax on additional income that is generated by the forced sale of livestock due to an adverse event such as flooding. The Adverse Event is self-assessed by the farmer by way of a statutory declaration on a form IR139. A localised event that affects only one farm could therefore qualify.

Deposits to this scheme attract daily interest (currently 6.5%pa) and may be withdrawn at any time. After 12 months they are, however, transferred to the main income equalisation scheme. The maximum deposit into the Adverse Event Income Equalisation Scheme is the difference between the sale price of the livestock sold because of the adverse event and the previous year's closing value for the class of livestock sold (at the class it would have been at the end of the year of sale if it had not been sold).

If any farmers have queries or would like some help they can contact the IRD Equalisation Department on (04) 527 6439.

 

FAMILY ASSISTANCE

This is assistance that is either paid fortnightly to families based on an estimated annual family income, and the number of children in the family, or as a lump sum when the income tax return is filed at the end of the year.

If farmers are receiving this at the end of the year, they may wish to consider receiving their entitlement on a fortnightly basis instead. If their income has reduced and they have never previously claimed, they may wish to apply by completing an FS1 application form.

The Child Tax Credit is paid in addition to family support where families are not in receipt of an income tested benefit, ACC weekly compensation for periods of three months or more, student allowance, NZ Superannuation or veteran's pension. It is possible that with the recent increases in family assistance and raising of the income levels at which the payments stop, they may now be entitled to receive some Family Assistance.

 

SPECIAL TAX CODE

Instead of having the normal rate of PAYE deducted from any employment income farmers may receive, this could be deducted at a rate more suitable to their situation; even a nil tax deduction rate, based on their annual income or loss and estimated tax liability. To apply for this they will need to complete an IR23BS.

 

CERTIFICATES OF EXEMPTION

In some circumstances it is possible to have an exemption from the deduction of resident withholding tax on interest you may receive. An exemption certificate may also be available for people who receive income subject to the withholding tax regulations. Application can be made on an IR332.

If farmers have any questions on the above,  contact IRD  on 0800 473 566. This phone number is dedicated exclusively to storm and flood victims.

 

REVIEW OF OTHER MATTERS WHICH MAY HELP PEOPLE EFFECTED

IRD is also looking at other issues for flood victims. This includes:

• Remission of penalties and interest on late GST, PAYE etc returns and payments;
• Lost/Destroyed records
• Deductibility of flood damage repairs, replacement of plant etc;
• Spreading forward farm income;
• Treatment of insurance proceeds and other compensations;
• Treatment of donated stock/cash;
• Child Support payments/debt; and
• Hardship tax debt write-offs.

 

FREE TAX ADVICE AVAILABLE

Advisory and information services are also available to farmers to make it easier to receive full entitlements to any credits while still meeting their taxation obligations. IRD  provide free tax advice on:

• How to complete returns/forms and other tax obligations;
• What expenses can be claimed;
• Record keeping
• Payment of tax; and
• Other information tailored to specific situations.

If farmers require an appointment with an IRD  officer, contact IRD  on 0800 473 566.