On the 14th of September new legislation was introduced in Parliament, some of which will affect wage and salary earners.
If you’re already one of our happy clients you don’t need to worry about these changes, we’ll continue to do the hard work and process your refunds hassle free, all you need to do is keep your contact details updated!
However if you'd like to know how these changes will affect everyday New Zealanders, here's a quick summary of the key points.
Changes to the PTS system:
At present, when a PTS (Personal Tax Summary) is requested we look at the last tax year and the 4 years prior, if we calculate that one of the previous years has tax owing, we will not continue to process that year. The new legislation will make it mandatory for anyone who submits a voluntary PTS to do so for each of the 4 years prior; this will be introduced as a staggered approach in 2015, and will come into full effect in 2019.
This means that when requesting a PTS, individuals must calculate the balance of the years as a whole, rather than on a per year basis. For example if one tax year indicates you have underpaid tax, but some or all of the other years show you have overpaid tax, it is likely the overall balance will result in a refund. There will however be many different and far more complex scenarios, so we advise careful calculation for anyone not using NZ Tax Refunds after 2015.
This change has been introduced as a step towards a more level playing field between those who choose to submit a PTS and those who are required to file an IR3. A change we would have liked to see is the extension of the open year from 5 to 7 years, which is the period available to those who are required to file an IR3.
Separation of social policy from Income tax:
Under this new Legislation, those who receive Working for Families Tax Credits (FAM) would no longer be required to request a Personal Tax Summary but will be able to have their WFFTC (Working for Families Tax Credits) entitlements calculated. This will mean those who can least afford to have any deductions from their refund will receive their full WFFTC entitlement.
We think this is a fairer way to deliver an existing policy, and that overall these changes are steps in the right direction to providing a world class tax system, to view a full copy of the bill, you can click here.
If you have any questions regarding this or would like to share your thoughts, leave us a message below or post a comment on our faceook page.
