Breaking tax payments down
If you are unable to pay your tax as it falls due Inland Revenue (IRD) suggest you arrange to pay it in instalments. This can be arranged online or by contacting our office. You will need to provide details of how much you can pay per instalment and when the instalments will start. To do this yourself you need to log into myIR. IRD provides a step by step guide on how to do this.
Another option is to apply for a write-off due to serious hardship if you know you won’t be able to pay the full amount. You will be required to provide documentation to prove serious hardship. If IRD grant relief from payment due to hardship and you have losses to carry forward, these losses will be reduced in proportion to the amount written off.
Depreciation and adjusted tax value on buildings
From the 2020/2021 year commercial and industrial buildings will be able to be depreciated for tax. This does not apply to residential buildings. Previously, tax depreciation on all buildings was at zero percent as a result of tax changes that applied from 2011. Please visit IRD’s website for some examples of this.
Working for Families Tax Credits
Working for Families Tax Credits (WFFTC) entitlements are based on your yearly family income. If your family income changes, your entitlement may change as well. If your yearly family income has decreased, you may be entitled to increased payments or an increased frequency of your payments.
If you currently receive your WFFTC in a lump sum each year and you are experiencing financial hardship we suggest you have this changed so you receive the payments on weekly or fortnightly basis. Please be aware, there is a chance you will have to repay some of this if your family annual income ends up higher than the amount used to calculate your WFFTC entitlement.
If you want update your Working for Families details, click here for further instructions.
The Government is proposing to give Inland Revenue the discretion to write-off use of money interest (UOMI) on payments due on or after 14 February 2020 if a taxpayer’s ability to make a tax payment on time has been significantly adversely affected by the COVID-19 outbreak.
Under the current proposal, UOMI could be remitted for a maximum of two years past the date of enactment, but the actual length will depend on the circumstances of each business or individual.
Under the current proposal, you will not have to be in a particular region or industry to get this relief. IRD have published more information on their website in regards to who may be eligible for this option.
Talk to one of our team about ways you can reduce or delay your payments to IRD. In part three of this series, we will explain a little more about the option of the mortgage holiday and Kiwisaver adjustments.
Disclaimer: Please note this information is up to date in accordance with the posting date and time of this particular blog article. Any further updates released by the government and its associated ministries can be found on https://covid19.govt.nz/ .