Inland Revenue on Covid-19 Impact Video Link Here
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. 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.
It is the Commissioner’s view that a customer has been significantly adversely affected by COVID-19 financially where the customer’s income or revenue has reduced as a consequence of COVID-19 and that as a result of that reduction in income or revenue is unable to pay their taxes in full and on time.
The type of relief available for new debt due to COVID-19
• Instalment arrangement
• 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
You can request interest and penalty remission due to COVID-19 through myIR under the “I want to” menu by choosing “Notify of impact by COVID-19”. To request remission of penalties and interest you will be asked to confirm that:
• Some, or all of the amounts owing were due on or after 14 February 2020,
• Your ability to pay by the due date, either physically or financially, has been significantly affected by COVID-19,
• You have contacted the Commissioner as soon as practicable to request relief and your client will pay the outstanding core tax as soon as practicable.
Wider Government support available for businesses adversely impacted by COVID-19
There are a wide range of support measures available for businesses. A summary is in the table below (courtesy of IRD), and full details are available on the www.business.govt.nz webpage Financial support for businesses — business.govt.nz.
If the position is dire and this is the last straw, our staff are availalble to discuss insolvency options for companies. If you just need time, we recommend getting in contact with your tax agent to communicate with IRD and seek an instalment arrangement.