As you may be aware from the recent press coverage, IRD rolled out the latest phase of their transformation project between the 18th-26th April 2019.
In the time since this new system went live there have been a number of issues identified by members of the public, as well as by tax agents such as Hnry. The sorts of issues identified to date are:
- Tax payments made throughout 2019 are being reallocated to previous tax years, if there was a previous debt outstanding
- Payments made to IRD from 18th April 2019 onwards have been incorrectly reassigned to the 2019 tax year, meaning customers could get refunded any tax they've pre-paid for the current financial year, alongside any refunds owing for last year.
- Provisional Tax amounts are being counted incorrectly, potentially providing false account balances
- Threatening letters about overdue debts being sent to customers who actually have no debts outstanding
As such, we are making a few changes in the short term, to ensure the impact to you is minimised:
- We are working with IRD to assist them in identifying where they have incorrectly allocated Hnry tax payments to the wrong financial year. IRD will have to manually transfer each transaction to the appropriate year which is a very time consuming process for them. If you have been impacted by this, we will hold off on filing your Income Tax return for last year to prevent you from being refunded money from the current financial year (or incurring an unnecessary tax bill). Rest assured, we will file your return as soon as IRD have fixed their issues.
- If your IRD Income Tax account is currently showing a "credit" for 2020 then we will delay the filing your Income Tax return for last year until IRD can confirm they won't also refund you this new financial year's taxes. If you do receive a refund of your 2020 taxes, please let us know.
- If you were previously subject to Provisional Tax, your account may be showing a large tax amount owing due to IRD adding your final assessment amount to your previous estimated provisional tax assessment (effectively "doubling" the amount of tax the system is expecting to be paid). We are having to get IRD to manually remove the Provisional Tax amounts as we come across them so if you have noticed this against your account, please let us know. It will look something like the below (payments of $9,661.99 less final assessment of $8,935.34 means there should be a refund of $726.65 owing, not a balance of $4,433.51 to be paid!):
- If you receive any unexpected or confusing letters from IRD, be sure to get in touch with us.
N.B. Until IRD can confirm that they have resolved their system issues, they have asked us to delay making further income tax and student loan payments through to them. Rest assured, any tax money deducted by us is being held in Trust in your unique Hnry account and will be passed straight through to IRD as soon as they can prove their system issues have been resolved.
Obviously we are always here to help so if you want any more information please don't hesitate to get in touch with the team.