Government ponders taxation error correction solutions
Revenue Minister Judith Collins recently said that correcting simple tax errors and sending that information to Inland Revenue was still largely manual and may be costing business.
Here’s some good news. Inland Revenue proposes integrating PAYE into normal business activity. For example, by allowing employers to use payroll software to make corrections to returns.
Another idea is to allow employers to report the employer superannuation contribution tax (ESCT) withheld, at an employee level.
These are small but useful changes that could simplify your life. Here’s another: a law change so that overpaid PAYE income that is not repaid still remains taxable as PAYE income.
Finally, if a business allows an employee to repay overpaid income, the law is about to be clarified so that this does not create a liability for FBT.
Tax law is complex and probably always will be. Small changes like these all add up, and we welcome their lightening of the load on business owners like you.