A closer look at upcoming changes Webinar for employers & - PowerPoint PPT Presentation

A closer look at upcoming changes Webinar for employers & not-for-profit organisations 22 January 2020, 2:30pm – 3:30pm IN CONFIDENCE

Welcome to the webinar Catherine Simpson, Transformation Account Manager IN CONFIDENCE

How to participate Submit your questions here Slides Presenter info Control panel IN CONFIDENCE

What we’ll cover today R4 lots of difference changes What’s changing for employers • Short process rulings • Research & Development tax incentive • Income equalisation • Working for families tax credits • Moving on from cheques • IN CONFIDENCE

What’s changing for employers? Employer activities and financials move to our new system • Employer accounts will be combined into the single Employer Activities (Payroll) account • Transactions and payments will show up sooner • New payment options when filing in myIR IN CONFIDENCE

Employer changes cont. Where possible, we’re consolidating employer notifications: We’ll group communications by ‘topic’: Deductions Notifications Start or stop employers are that advise of deductions for currently return errors employees making for to be fixed employees Based on feedback received, we’ll have one page per employee IN CONFIDENCE

Employer changes cont. We’re improving the employee on -boarding process: • New Employee Details (IR346) and KiwiSaver Enrolment (KS1) forms combined • Supply employee’s first and last name • Update employee details broken down • KiwiSaver status for new employees, not existing employees • Advise of income received exempt from KiwiSaver contributions IN CONFIDENCE

Employer changes cont. Employer transactions will display differently in myIR: • Account name change from ‘Payroll (was ir - File)’, to ‘Payroll’ • The landing page of the Payroll account will be redesigned • Employment information (EI) return – breakdown of different deductions will still be shown • ‘My details’ tab renamed to ‘Names and addresses’ Collecting additional data from employers – Hours paid (digital channels only) IN CONFIDENCE

Employer changes cont. The way employers submit information Future state Current state ‘File transfer’ – ‘I want to’ – then From April 2020 choose file to upload from: 1. File transfer Payday schedules Ability to drop off a single CSV • 2. File transfer Payday file relating to the EMP amendments account, or zip file of multiple 3. File transfer employee details CSV files 4. Upload KiwiSaver file Fields evaluated & feedback • 5. Upload compressed zip file on any errors identified 6. File transfer employer schedules File formats remain • 7. File transfer EMS amendments unchanged 8. File transfer employer deductions IN CONFIDENCE

Employer changes cont. Improved validations for online submissions of employment information New fields added to employment information return: To be completed if applicable instead of using separate tax code on additional line item: • Employee Share Income (ESS) • Extra compulsory deduction for student loans (SLCIR) • Extra voluntary deductions for student loans (SLBOR) Letters issued to employer and customer when loan is close to being paid off: • If below $1,000 or expected to be paid in 3 months IN CONFIDENCE

Current summary screen IN CONFIDENCE

Current transaction detail IN CONFIDENCE

Design features from April 2020 • Single return, single account, single payment • Our new system • You will see transactions for each type • Things to note: o interest and small balance write off calculation changes o changes due to consolidation IN CONFIDENCE

Future view of consolidated account Small to medium employer IN CONFIDENCE

Future view of consolidated account Small to medium employer IN CONFIDENCE

Future view of consolidated account Transaction detail IN CONFIDENCE

Future view of consolidated account Return detail IN CONFIDENCE

Future view of consolidated account Return detail IN CONFIDENCE

What’s not changing? • The payment date • How employers communicate with us through voice, paper and electronic channels • Using paper solutions IN CONFIDENCE

Short process rulings New binding ruling service • From 1 October 2019 • eligible customers can apply Apply, pay and track status • through myIR Cost: $2000 (inclusive of • GST) Turnaround time: 6 weeks • • https://www.ird.govt.nz/s hort-process-rulings IN CONFIDENCE

Research & Development (R&D) Tax Incentive Why an R&D Tax Incentive? Government target: increase R&D • expenditure to 2% of GDP by 2027 Incentivise and support business R&D • Provides certainty, predictability, and • broad reach Applicable from start of 2019/2020 income • year IN CONFIDENCE

Research & Development Tax Incentive - Features 15% tax credit on eligible expenditure • Offsets tax to pay/limited refundability • Applies from 2019-2020 income year • $50K minimum threshold • Maximum of $120 million in eligible • expenditures (with waiver) IN CONFIDENCE

Eligibility 3 pillars to eligibility Eligibility tool and detailed guidance available on our website: www.classic.ird.govt.nz/calculators/keyword/rdltc/calculator-rdti-eligibility-tool.html Contact us: R&DTIteam@ird.govt.nz IN CONFIDENCE

Income equalisation Mechanism for specific businesses to even out income • fluctuations by spreading gross income from year to year IN CONFIDENCE

How income equalisation schemes work Relevant businesses: Deposit funds into income equalisation scheme • Claim the deposit as tax deductible expense • Request funds to be withdrawn • IN CONFIDENCE

Changes that affect customers Managed in our new system • Customers can manage and view in myIR • Electronic payment methods – no more forms • o myIR – make a payment o Credit card and direct debit o ‘My Pay Tax’ option through banks o Over the counter at banks Withdrawals: • o Submit electronic request on myIR o Paid to customer via direct credit Income equalisation code is EQU • IN CONFIDENCE

Working for Families Tax Credits (WfFTC) New customers – • request backdated entitlement Automatically offset • partner’s income tax credit Change in payment • due date – 30 days to pay New entitlement • instalment arrangement option IN CONFIDENCE

Future state Current state vs Customer applies for Working for Backdated Customer applies for Working for Families, offered the self-service entitlement Families, has to wait until year end option to request for lump sum to receive back dated payment. payment of any backdated entitlement to be paid out. Both primary caregiver (PCG) and If Working for Families partner has partner jointly liable for Working for Partner’s credit income tax credit, it will be Families debt. If Working for offset automatically offset against PCGs Families partner has income tax overpayment for that year. If the refund, it’s automatically refunded PCG has income tax refund, this will to partner. If PCG has an income be automatically offset. tax credit, this is offset towards the Working for Families debt. Customer assessment can’t be If customer’s assessment is held up finalised if waiting for another due to another person’s details person’s details – pay date has 30 days to pay required, and payment due date is passed by the time they are advised less than 30 days in future, they of any amount to pay. Can result in have 30 days to pay. penalties and interest, need to contact IR to request to have these remitted. New option to repay customer If customer has Working for Working for Families overpayment or Families overpayment or debt to debt. Can set up entitlement Entitlement pay, they can set up instalment arrangement, use current weekly or instalment arrangement to make repayments fortnightly entitlement to repay. arrangement from their bank account. IN CONFIDENCE

Moving on from cheques Cheques no longer accepted from 1 March 2020 Discuss payment options with: o Your bank o Your tax agent IN CONFIDENCE

How to pay Pay online in myIR Debit or credit card payments • Set up a direct debit in myIR • o Authorise IR to take payments o Make payment straight away, or future dated o You will know in advance how much will be debited Pay on our secure payment website Use debit or credit card to pay securely online • www.ird.govt.nz search “make a payment” • Pay using internet banking Authorise your bank to make one-off or regular payments • o Make single payment straight away or set future dated payments o Schedule regular payments for fixed amount IN CONFIDENCE

How to pay Pay through Westpac You do not need to be a Westpac customer • Pay by EFTPOS or cash • Use a Smart ATM • Bring the barcode on your statement (from 1 July 2020) • Pay through your bank Phone or visit your back to discuss options • Eg direct credits, automatic payments and phone banking • o Automatic payments - allows for 2 people to sign, one-off or regular payments Pay IR by phone New self-service function – SPK2IR – available early April 2020 • o Arrange payments over the phone Payment tips Provide IRD number, amount, period you are paying for and tax type • IN CONFIDENCE