Nobody likes paying tax at the best of times, and let’s face it, it hasn’t been the best of times recently.
We Beanies use our best experience, judgement, and training to interpret accounting and tax legislation to enable you, the taxpayer, to pay the least amount of tax legally possible.
Ultimately though – if you make a profit, you pay tax.
- Tax minimalisation vs tax avoidance
- How to pay tax
- When do I pay my tax?
- Help – I have overdue tax!
- IRD payment plans/instalment arrangements
Tax minimalisation vs tax avoidance
Beany abides by the Code of Ethics of the Chartered Accountants of Australia and New Zealand to keep its members and the public safe.
But how far do we go in advocating and advising our clients on tax minimisation? And what does tax minimisation mean as opposed to tax avoidance (or even evasion)?
Tax minimisation is where we use our best experience, judgement and training to interpret accounting and tax legislation to enable you, the taxpayer, to pay the least amount of tax legally possible.
Tax avoidance or evasion involves more dubious schemes that are designed to help you avoid your legal tax responsibilities.
As professionals, it’s fair to say that we often “know it when we see it” to paraphrase a famous saying. We can feel when a suggested tax scheme is fair and sensible, or when it is an attempt to subvert tax law.
We spend our working hours navigating between the desire of our clients to pay the least tax possible and the heavy hand of tax legislation.
You pay us to keep you safe. But you also pay us to make sure you’re paying the least amount possible. That’s the grey area in which we live and work.
If you’re unsure with our treatment of any item, the best thing is to chat to one of our friendly team who will be able to lay out the likely risks and rewards. Ultimately the decision rests with the you, the taxpayer, but we are here to provide you with all the information to make the best decision.
Paying your fair share of tax is the law, paying too much is not.
HOW TO PAY TAX
Nobody likes paying tax, but at least the IRD has made it easy.
We recommend internet banking, as credit and debit card payments have additional fees attached.
The five main NZ banks all have details on their websites, showing you how to make tax payments. Most of the banks also have a separate “pay tax” function, distinct from making a normal payment. Below are instructions from the main banks on how to access this. Please note, the following details are for using internet browsers, not for bank apps.
Beany clients have all the relevant information readily available through Tax-IQ, which can be accessed by logging onto their Beany page.
Go to the “pay and transfer” menu and select “pay tax”
Select “payments” and then choose “IRD payment”
Use the usual “pay and transfer’ option, but in the “to” box select “tax”
Select pay and transfer, then select the “pay tax” option from the list.
Select pay and transfer, then select the “pay tax” link
When should I pay my tax?
On time, is the easy answer.
We help our Beany clients by:
- Sending letters a few weeks in advance, advising you of the amount and due date
- Showing upcoming tax payments via Tax-iQ on your main Beany page, by month and year
Late payments to the IRD mean that interest and penalties can be charged. If you don’t think you can pay on time, we recommend setting up a payment plan with the IRD. You can do this through your myIR login, or if you need some extra help just contact our friendly Support team.
Help – I can’t pay my tax!
If you’re unable to make the full payment now, we recommend setting up a payment plan with Inland Revenue – you can do that through your myIR login or chat to our friendly Support team. If things have gotten a bit out of control then it is best to get in touch with Support, and we can look to discuss your situation on your behalf with Inland Revenue.
Another option we can consider is tax pooling. Tax pools are registered third parties that can back pay your tax to the date it was due and charge you a fee to do this. The good thing is the fee is usually much less than interest charged by Inland Revenue, plus you avoid the late payment penalties. If this is something that interests you, then please get in touch with our Support team.
We always recommend being up-front with overdue tax. Each day tax is overdue, further interest and sometimes more penalties can be added on.
Sorting it out, either by paying immediately or via a payment plan, will probably relieve some of the pressure you may be feeling.
Tax can be a bit overwhelming at times, so let us help!
IRD PAYMENT PLANS
If you have tax that you don’t think you can pay on time, or you have overdue tax, then arranging a payment plan with Inland Revenue is the best way forward.
We encourage you to think about this ahead of the due date if possible, as it can make for a better outcome with the potential for reduced interest and late payment penalties.
You have a couple of options:
- It’s easy to set up yourself by logging into your myIR portal and navigating to the option “request an instalment arrangement”.
- Send a message to us at Support and we can help set these up. You’ll need to let us know:
- The tax type – for example, GST or Income Tax
- The frequency of payments – monthly, fortnightly, or weekly?
- The amount of each payment (the IRD sets out a minimum payment amount, based on the level of your debt)
- The start date of the payment plan (which must be more than seven days from the application), and
- The reason that you need this payment arrangement – the IRD always note this on their file
Once the plan is approved, we’ll update your Tax-IQ page in Beany to show the payment amounts and due dates.
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