Support from the IRD and Banks - Engine Room Chartered Accountants

The IRD have advised that if taxpayers are adversely impacted by COVID-19, and they pay the outstanding core tax as soon as practicable that they will automatically write-off any penalties and interest.

Support from the IRD:

The type of relief available for new debt due to COVID-19 if you are unable to pay your taxes on time and in full are:

Instalment arrangements
Instalment arrangement – deferred payment start date
Partial write-off due to serious hardship and payment of the remaining tax by instalment or a lump sum
Partial payment and write-off the balance under maximising recovery of outstanding tax
Write-off due to serious hardship

Taxpayers who are impacted by Covid-19 are suggested to apply for instalment arrangements.

Customers who may already be in an arrangement but consider they may not be able to continue with the current terms due to being significantly affected by COVID-19 may ask to renegotiate an instalment arrangement.

The key message is to get in contact with IRD. There is a page on the IRD website called Manage My Tax which you can access here that provides more information on the above.

Covid indicator – This is something we have in myIR and it’s a simple tick box to let IRD know who is affected by Covid-19. For those clients where we know you have been affected we have this ticked, but please let us know if you think we need to update this for you.

Tax Pooling – Tax Pooling is an option we urge you to consider. We suggest it is not in the best interest to rely on the IRD to refund penalties as you will still be outside ‘safe harbour’. Use tax pooling to its best advantage or defer tax to give you more certainty. Speak to us about tax pooling for you and how it works.

Support from the Banks:

Some Banks have removed the fees associated with contactless payment methods for merchants. Others have a few measures in place that may help, such as:

Reducing or suspending principal payments on loans and temporarily moving to interest-only repayments
Temporarily deferring all principal and interest repayments on home loans and some small business loans
Providing loans to businesses under the Business Finance Guarantee Scheme
Helping with restructuring loans, for example extending the term of the loan
Consolidating loans to help make repayments more manageable
Providing access to short-term funding
Waiving some fees, for example breaking a term deposit or setting up an overdraft facility
Providing advice on how best to manage investments such as KiwiSaver at this time
Offering advice and support in cases of financial hardship
Referring individual customers to budgeting services.
Temporary Overdrafts