One issue we see quite often is clients making tax payments to the wrong IRD account, or against the wrong financial year.
IRD Tax Accounts
When making tax payments to Inland Revenue it is important to select the right account the payment is being made to. If payment has been made to the wrong account it will look as if you have missed a deadline and then penalties and interest can be charged. And although the penalties and interest will generally be expunged when the payment is corrected, it can be a time-consuming and frustrating process to raise with the IRD.
Tax payments can be made electronically or by posting cheques. Particularly when posting cheques, ensure you have allowed enough time for the payment to reach IRD before or on the due date. If the due date falls on a weekend or public holiday, the deadline will be the next working day.
Financial Years
In New Zealand, the most common business and personal financial year is from 1st April until 31st March.
1st April 2016 – 31st March 2017 = 2017 Financial Year
1st April 2017 – 31st March 2018 = 2018 Financial Year
1st April 2018 – 31st March 2019 = 2019 Financial Year
When making payments to IRD it is important to specify the correct period or year the payment is for, or again it can look as if you have missed the correct payment. The period details to include with your payment will be the last day of the period, i.e. 31/03/2019 for the standard 2019 financial year.
Please contact us if you have any questions regarding making tax payments.