Update: 11 April 2022
Tax pooling deadline extended for those affected by Covid-19
Taxpayers impacted by Covid-19 have up to 183 days after their terminal tax date (or, if earlier, 30 September 2022) to settle their 2021 income tax liabilities by using Tax Traders.
Inland Revenue recently released a variation to the Income Tax Act 2007 to extend the time for tax pooling transfers for the 2021 income year. This is to provide some relief to businesses struggling with cashflow or resourcing difficulties resulting from the effects of Covid-19 between July 2021 and March 2022 (see details on Inland Revenue’s website).
Tax Traders provided feedback to Inland Revenue when the change was first proposed and voiced the concerns of many clients around challenges they faced due to recent Covid-19 events. We are pleased to have been able to input into this change and provide as much assistance as possible to taxpayers during these difficult times.
Conditions for eligibility
To qualify for the extended timeframe to settle 2021 income tax via tax pooling, taxpayers must meet the eligibility criteria set out in the variation:
- Terminal tax date of 17 January 2022 or later. The majority of taxpayers (linked to a tax agency) have a terminal tax date of 7 April 2022, which means most taxpayers using a tax agent will now have until 30 September 2022 to settle their tax pooling arrangements via Tax Traders. For taxpayers with a terminal tax date other than 7 April, they will have up to 183 days from 17 January 2022, 7 February 2022 or 7 March 2022 as applicable.
- Negative impact as a result of Covid-19. This applies to taxpayers who have experienced (or are expected to experience) a significant decline in revenue due to Covid-19 between the period of July 2021 and March 2022, and are unable to complete or enter into a tax pooling arrangement as a result. This also applies to scenarios where taxpayers have difficulty finalising their tax return prior to 31 March 2022 due to circumstances arising from Covid-19.
- Set up the tax pooling arrangement by 21 June 2022. The taxpayer must have a tax pooling arrangement set up with Tax Traders on or before 21 June 2022 in order to be eligible for the extension. The final payment under any such arrangement must be received no later than the earlier of (a) 183 days after a taxpayer’s terminal tax date for the 2021 income year, or (b) 30 September 2022.
For 2021 income tax arrangements, our online tools have been updated to display the necessary checkbox confirmations so taxpayers can access this extension. Log in to our portal.
The team is on hand to assist with any questions or queries you may have regarding tax pooling. Please phone us on 0800 829 872 or email firstname.lastname@example.org and we will be happy to help.