TAX TIDBITS
Issue Sixteen, February 2007
In this months issue:
Tax Payments - When Received in Time
GST Payment Date Changes
IRD Use of Money Rates
TAX PAYMENTS - WHEN RECEIVED IN TIME
The Inland Revenue has recently issued an updated practice statement setting out their procedures for accepting tax payments as being made on time. This has been updated to reflect the changes in due dates for GST coming into effect for taxable periods ending on or after 31 March 2007 (see the next article for more details on these). We summarise when various tax payments are considered to be on time according to the IRD as follows: -
Payments by post:
Payments will be accepted as being received in time if mailed and postmarked on or before the due date. For Rural Delivery taxpayers, the date of payment is when it is received by the postal service. For overseas post, the time of actual receipt by Inland Revenue will be used.
Electronic payments:
A payment will be received in time when it has been electronically paid or direct credited into an Inland Revenue account either on or before the due date. Internet payments must be completed prior to the end of the banks' online business hours to be recorded as received on that specific day.
Physical delivery:
A payment will be accepted as being received in time if it is deposited into an Inland Revenue drop box by the close of business on the due date.
Post-dated cheques:
Inland Revenue will not bank post-dated cheques until the specified date. A cheque that is post-dated after the due date, even though it is received on or before the due date, will be treated as late.
Weekends and public holidays:
If a due date falls on a weekend or a public holiday (including a provincial anniversary day), Inland Revenue will accept a payment as in time when it is physically delivered or posted on the next working day. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), then an electronic payment will be accepted as in time when it is credited into an Inland Revenue account on the next working day.
If you are unsure with any due deadline then please do not hesitate to contact us.
GST PAYMENT DATE CHANGES
As mentioned previously, the due dates for the filing and payment of GST returns is set to change for taxable periods ending on or after 31 March 2007. The Inland Revenue has recently finalised these as being: -
?
The 28th day of the month following the end of the taxable period, if the taxable period does not end in March or November; or
? The 7th day of May, if the taxable period ends in March; or
? The 15th day of January, if the taxable ends in November.
As always, the due dates will be pre-printed on your orange GST forms, however, if you are unsure how this will affect you then do not hesitate to contact us.
IRD USE OF MONEY RATES
The Inland Revenue Department has announced changes in their use of money interest rates. The changes effective from 8 March 2007 now mean that any underpayment of tax will attract an interest charge of 14.24% and any overpayment of tax will mean payment of interest at 6.66%. Previously these rates were 13.08% and 5.71% respectively.
It is disappointing to see not only is the underpayment rate further increasing above a commercial rate but that the gulf between the two rates is widening. At 14.24% the interest is excessive and has a penal effect. If you are exposed to the use of money interest regime then the best way to ensure you are paying the correct amount of tax at the right time is to have HWI review your financial statements on a regular basis (usually prior to each provisional tax installment date or even monthly if profitablity is significant).
What's new at HWI:
Andrea Bentham is heading on her "OE" with her last day with us being Wednesday March 7th. We wish her all the best on her adventures!
HWI has welcomed Toby Attwood to the team as an intermediate accountant and replacement for Andrea, working predominately for clients of Murray Judge.
Disclaimer Information contained within this document is of a general nature and does not constitute advice. Readers are cautioned not to act or reply on it without first seeking professional advice.
