Thousands late on payday filing
IRD following up with 10% of businesses yet to meet contentious new obligation
Thousands of businesses have yet to file payday information to the Inland Revenue Department more than four months after a change to the system.
From April 1 all employers were required to file employee pay details to the IRD within two days of a person being paid — a shift from the previous monthly employer schedule which typically saw them file the information on the 20th of the month after payment.
The change was made to make it easier for the IRD to ensure payments are accurate and to enable automatic
tax refunds. Before it was introduced the change attracted criticism from business owners and tax experts who said it would add time and extra costs to payroll administration.
Richard Owen, IRD’s small business segment leader, said while 90 per cent of businesses were meeting the new obligations a small minority were “still not managing it”.
An IRD spokesman said the other 10 per cent included those who hadn’t filed and those who did not need to file because they hadn’t paid any staff during the filing period.
The spokesman said it was following up with employers in both those categories to understand their situation.
There are around 200,000 employers in New Zealand.
Owen said its analysis showed most of those failing to file correctly had fewer than five employees.
“We think the main reasons they’ve fallen behind are a lack of awareness and understanding about their obligations and a perception that it’s difficult to send Inland Revenue the necessary employment information,” Owen said.
Owen said those obstacles could be easily overcome and it urged businesses to get in touch so it could help them work through the situation.
Businesses can either use a payroll software company to supply the information or enter it directly into the IRD’s online service MyIR.
Owen said doing it directly through its online portal was almost as quick as using a software provider and was often the preferred option for businesses with a small number of staff to pay. “After the first filing of employment information, this free service pre-populates some of the information required based on previous filings so often it can simply be a case of making a few adjustments and submitting.”
Owen said it suspected some employers were also worried about making mistakes.
“We’ve heard particularly from employers for whom English is a second language that some are a little anxious about getting things right and perhaps a bit confused about what’s required. We want to ease those concerns,” he said.
Owen said employers had done well to come to grips with the change so quickly.
“Payday filing is off to a good start.”
We think the main reasons they’ve fallen behind are a lack of awareness . . . about their obligations. Richard Owen, IRD