Our response to COVID-19 - including complimentary feeGuard >>

COVID-19: News
and Updates


Update: 2 April 2020

No blanket removal of UOMI on late payments

Clarifying IRD's statements on the matter of interest write-offs

The COVID-19 tax legislation passed under urgency on 25 March has confirmed the early guidance given to us by IRD. On the same day IRD released the following regarding the late payment of taxes:

“If your business is unable to pay its taxes on time due to the impact of COVID-19, we understand, you don’t need to contact us right now. Get in touch with us when you can, and we’ll write-off any penalties and interest.”

This statement reads as fairly open-ended. However, under the new law, these write-offs will only be applied where the taxpayer is "significantly adversely affected by COVID-19". Early indications are that in practical terms, taxpayers will need to demonstrate the following to IRD:

  1. a 30% drop in revenue/income as a result of COVID-19; and,
  2. that they have sought financial assistance (e.g. a bank overdraft extension) and been turned down.

Not all taxpayers will meet these criteria, and it will take time and effort to provide the required evidence to IRD.

To remove uncertainty, we recommend tax pooling as a safe option - especially with feeGuard now being complimentary with all tax finance transactions. This means that if it transpires that IRD waive your UOMI interest, we will refund the full amount of your finance fee. No questions asked.

Find out more

 


Update: 26 March 2020

Update - IRD's COVID-19 policy

Read all the detail on our Understanding the Stimulus Package page.

In brief:
  • The government has enacted the bill containing the COVID-19 UOMI concession. This bill enables waiver on UOMI and penalties on tax payments under certain criteria.
  • We are staying in close contact with IRD to understand the changes that have been introduced and how they will apply.
  • We are waiting on further information from IRD regarding what tax payments can be delayed and how significantly taxpayers need to be affected by COVID-19 to take advantage of the UOMI and penalty waiver.
  • Our best guidance is that if you have the resources and ability to pay your taxes as they are due you must pay them. We are here to help with that. IR still needs to collect taxes to fund this assistance for those who desperately need it.

We will continue to keep you updated here and on the COVID-19 section of our website.

 


Feature Release: 26 March 2020

Three new reports available now

Today we are releasing three new reports that provide greater clarity and a more intuitive way for you to capture and view key client data. We know that better reporting makes a difference to the way you work and we are committed to improving our system to more closely mirror the kind of information you want and the way you want to receive it.

1. Tax Pooling Summary Report

This report summarises deposits by tax year and shows the amounts available at each date and whether the payment has been made or still waiting to be made. This will enable you to see at a glance how much your clients have paid towards each year’s tax liability. The report will also tell you if the amount has been paid or whether it has been ordered but not yet paid for. You will find the Tax Pooling Summary Report via the client dashboard and the Reports > Tax Pooling Summary menu entry.

2. Taxpayer Interest Report

This report summarises interest earned and interest paid by tax year. Interest earned is shown gross with a separate column for RWT deducted. This provides the information you need to reflect the impact of tax pooling transactions on your clients’ tax return. You will find the Taxpayer Interest Report via the dashboard and the Reports > Interest Report menu entry.

3. Global Interest Report

This report summarises the credit and debit interest for all of your clients in a single place. This allows you to see easily if a particular client has any tax pool transactions relevant to their tax return. You will find the Taxpayer Interest Report accessible via the dashboard and the Global Reports > Interest Report top menu entry.

At Tax Traders, we love it when our clients share their ideas, challenges and wish lists with us and these new reports are a direct result of feedback we’ve received from our client community. It’s just another example of how we are shaping the future of tax pooling, together.


Update: 24 March 2020

We are available to take your call 24/7

Speak with our tax specialists anytime that suits you

We are open for business and have extended our contact hours. This means that any time you ring 0800 TAX TRADERS, one of our tax pooling specialists will be available to personally take your call. We are ready to resolve your tax pooling query on the spot, no matter the time of day or night.

Our virtual office has been in place since Monday 23 March and our team is available as per usual via phone and email, 24 hours a day, 7 days a week.

If you need any help from us, please reach out at:
team@taxtraders.co.nz
0800 TAX TRADERS (0800 829 872)

 


Update: 22 March 2020

A message from our founders

We are working remotely and here to help

You will be aware that our Government announced a new alert system over the weekend as part of the response to COVID-19. As a country, we are on Alert Level 2 with a request that businesses that can work from home, do so. In response to this, the Tax Traders team will begin working remotely from Monday, 23rd March.

At Tax Traders our focus on online tools and automation, along with flexible work practices, means we are well placed to cope with the working environment we now find ourselves in. Please be reassured that Tax Traders services will continue to operate and you should experience no disruption as we move to a full remote working model by Wednesday of this week.

Please continue to contact us via phone, email or here through the website as you always have.

We are in close contact with IRD as the situation evolves and will keep you regularly updated, particularly with returns for FY19 and terminal tax due in the next couple of weeks.

The safety and well-being of our staff and clients, and their families and communities has always been our primary concern and remains so at this time. Please know that thoughts are prayers are with you all.

Warmly,

Josh Taylor and Nicola Taylor
Co-Founders

 


Update: 18 March 2020

feeGuard, complimentary from 18 March

This option now bundled with new tax finance arrangements, at no cost.

Delaying an upcoming tax payment is one of the fastest and easiest ways to ease cash flow pressure now.

To further help New Zealand businesses we have made our feeGuard option complimentary, and are bundling it with all delayed payment arrangements from today.

feeGuard refunds the finance fee on any portion of a delayed payment that the taxpayer doesn't need at maturity. If the amount of tax finally needed is over-estimated, your client gets that portion of the up-front fee back. This insurance option has traditionally required you to opt-in at the cost of an additional 0.5% on the finance rate.

From today, all customers have access to that extra peace of mind by default and at no extra cost.

 


Update: 18 March 2020

How tax pooling can help

A one-page guide to relieving cash flow pressure with tax pooling.

In the face of rising cash flow pressure for businesses, we’ve summarised the most immediate tax pooling solutions onto one page.

Please feel free to forward this PDF to any of your clients who would benefit from accessing more working capital for their business.
 
How Tax Pooling Can Help (PDF) >>

 

 


Update: 18 March 2020

Proposed Stimulus Measures

The two key changes for tax and tax pooling are:

  1. The provisional tax threshold has changed from $2,500 to $5,000 and is estimated to impact 95,000 small businesses, allowing them to delay payment of their tax obligation.
  2. Establishment of a new discretion for the Commissioner to waive interest and penalties on late tax payments for taxpayers and provide instalment plans under certain, limited circumstances.

The discretion will be available where the taxpayer's ability to pay their tax on time has been significantly adversely affected by the virus. We expect the conditions when the Commissioner might use her discretion to be fairly tight but its likely taxpayers will have to prove that:

  1. Their income or revenue has reduced by at least 30% compared to the same month 12 months earlier, or they are unable to process their tax payment to IRD; and
  2. They have explored other options to support themselves financially, such as talking with their bank about additional finance or re-negotiating other loans/overdrafts.
    NB: Tax Pooling is one of the most accessible options for support under this point.

While the wording does cover provisional tax, the discretion appears to be aimed mostly at monthly payments (i.e. not provisional tax). Tax pooling continues to be the IRD's policy of choice for taxpayers to delay upcoming provisional tax requirements.

 

Expected decrease in UOMI rates

It is likely that the IRD will decrease their interest rates for both under- and over-payments of tax. Based on the Official Cash Rate being cut to 0.25% this week, we expect that:

  1. The rate IRD pays on overpayments will decrease from 0.81% to 0.00%
  2. The rate IRD charges on underpayments will decrease from 8.35% to approximately 7.00%

We anticipate these new rates will apply from 7 May, and will keep you informed as the details are confirmed.

Index

  1. News and updates
  2. Frequently asked questions
  3. Peace of mind for delayed payments
  4. How tax pooling can help
  5. Understanding the stimulus package – tax pooling is part of the toolkit

 


Latest updates

  • No blanket removal of UOMI on late payments – Read >>
  • LEGISLATION PASSED - Stimulus Package UpdateRead >>
  • Three new reporting tools available now – Read >>
  • Now available 24/7 – Read >>
  • A message from our Founders – Read >>
  • feeGuard, complimentary from 18 March – Read >>
  • How tax pooling can help; PDF to share – Read >>

 


Resources for download

 


Useful links