Revenue Minister Judith Collins has welcomed the release of a tax officials’ paper, seeking feedback on options to reduce the cost to employers of administering PAYE information.
“We are aware that certain aspects of PAYE, such as correcting simple errors and sending that information to Inland Revenue, are still largely manual. This can impose excessive compliance costs on business.
“The Government is looking to reduce some of these costs as part of Inland Revenue’s Business Transformation programme, so business owners can concentrate on the job of growing their businesses,” Ms Collins says.
A tax bill currently before Parliament contains proposals for reducing employers’ PAYE compliance costs by integrating the PAYE process into normal business activity.
Further proposals released would make the task of correcting PAYE information errors easier by allowing employers to use payroll software to make corrections to already filed returns, or in some circumstances, to make corrections in a subsequent return. However, the proposals would not mean that all employers would need to shift to digital services.
“It’s important that all businesses should benefit from simplified PAYE error correction processes. For that reason, employers who currently file through Inland Revenue’s website or on paper could continue to do so. Employers would be able to access their filed returns through myIR to correct their records, and paper-based error correction forms would continue to be available to employers for the foreseeable future,” Ms Collins says.
Purpose of this consultation
This consultation is being carried out on behalf of the Minister of Revenue and seeks feedback to help shape the regulations in proposed new section 23M of the Tax Administration Act.
With the co-operation of providers of payroll software, a largely automated approach to error correction is proposed for employers using payroll software. However it is important that the requirements for error correction also meet the needs of employers who file through Inland Revenue’s website or on paper. Submissions are also invited from these employers.
Summary of potential solutions
Several design principles have been identified to reduce the need for rework:
- Where possible, processes for adjustment should be automated and allow employers to make adjustments consistent with their payroll practices.
- Employers who use payroll software should be able to use their software to generate the information they require to amend an already filed return.
- Employers should also have the option of accessing filed returns through myIR and self-correcting incorrect returns.
- A paper error correction form will continue to exist, and employers who only need to make simple corrections will be able to do so by telephone.
The paper, PAYE error correction and adjustment, is available at: http://taxpolicy.ird.govt.nz/publications/2017-ip-paye-error-correction/overview. Submissions close on 15 September 2017.
NZPPA encourages all payroll practitioners to read through the paper and provide feedback to IRD
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