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.
