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SPS 19/01 Tax payments - when received in time

This statement also appears in Tax Information Bulletin, Vol 31, No 3 (April 2019).

Introduction

Standard practice statements describe how the Commissioner of Inland Revenue (the Commissioner) will exercise a statutory discretion or deal with practical issues arising out of the administration of the Inland Revenue Acts.

This standard practice statement (this Statement) sets out the Inland Revenue’s practice for accepting tax payments as having been made in time.

With the influence of technology there has been a significant shift in practice to use digital methods for making tax payments. The Commissioner encourages customers to use direct banking facilities when they make tax payments (or when refunds are issued).

Application

This Statement applies from 1 March 2019. It replaces SPS 14/01 Tax payments – when received in time, which was published in Tax Information Bulletin, Vol 26, No 8 (September 2014).

Standard practice

Summary

  1. This Statement sets out when Inland Revenue would accept payments as having been received in time, including:
  • electronic payments (from New Zealand)
  • debit/credit cards
  • cash and eftpos payments
  • payments by cheque (including from overseas)
  • tax pooling
  • tax transfers
  • overseas electronic payments
  • weekends and public holidays

Detailed discussion

  1. This Statement applies to all tax types, including student loan repayments and child support payments.

New Zealand electronic payments

  1. Customers are encouraged to make payments electronically, including by internet banking. Payment by this method minimises delays and includes a formal notification of the date and time the payment was made to Inland Revenue. A payment will be received in time when it has been electronically paid or direct credited into an Inland Revenue account either on or before the due date. You may need to be familiar with your bank's processing schedule.
  2. If a customer wishes to post-date an electronic payment the “my tax payment” option is available on all major New Zealand banks’ websites.
  3. Customers who are registered for myIR can set up direct debits where available for certain revenue types. A direct debit payment will be received in time when it has been credited into an Inland Revenue account on or before the New Zealand due date.
  4. Tax agents who are registered for myIR can set up instalment arrangements and one-off payments on behalf of their clients (who are registered for myIR) by direct debit on a condition that the client has authorised this action.

Debit/credit cards

  1. Customers can make payment by debit/credit card over the phone, through the payment page on our website for all revenues, and through myIR, our secure online service.
  2. A convenience fee of 1.42% is payable (charged by the banks) on all debit/credit card tax payments made within New Zealand. This fee also applies to debit/credit card tax payments from overseas, except for child support debt and student loan repayments where Inland Revenue pays the convenience fee.
  3. A debit/credit card payment will be received in time when it has been paid or direct credited into an Inland Revenue account on or before the New Zealand due date.

Cash and Eftpos payments

  1. Payments by cash or eftpos cannot be accepted at an Inland Revenue office. Customers may make payments by cash or by eftpos at branches of Westpac. Payments made over the counter or by eftpos are received in time if they are made on or before the due date. (Note: While payment of tax may be made at Westpac branches, Westpac is not authorised to accept returns. Returns may be filed electronically, posted to Inland Revenue or delivered to an Inland Revenue office.)
  2. Customers with a Westpac bank account may also make payments via Westpac ATMs, provided they have a payment slip with a bar code that has been issued by Inland Revenue.

Payments by cheque

Physical delivery to Inland Revenue offices

  1. Cheque payments will be accepted as being received in time if delivered to an Inland Revenue office on or before the close of business on the due date.
  2. Drop boxes are now inside Inland Revenue office reception areas and are only available during reception opening hours.

Cheques through post

  1. Cheques posted to an Inland Revenue postal address, whether posted from within New Zealand or from overseas, must be received on or before the due date. Payments by post should be sent to: Inland Revenue, PO Box 39050, Wellington Mail Centre, Lower Hutt 5045.

Post-dated cheques

  1. Inland Revenue will make its best efforts not to bank post-dated cheques until the specified date. A cheque that is post-dated after the due date, even though it may have been received on or before the due date, will be treated as late. This applies to cheques that are mailed or physically delivered.

Tax pooling

  1. Tax pooling involves customers depositing money with a tax pooling intermediary who then deposits that money into a tax pooling account with Inland Revenue. These deposits are not tax payments at this stage.
  2. It is when a payment is transferred from the tax pooling account into a taxpayer’s tax account that it becomes a tax payment. The date of payment to Inland Revenue is triggered when the tax pooling deposit is transferred into a taxpayer’s account. The effective date of the transfer can be no earlier than the date the tax pool deposit was received by Inland Revenue.
  3. For more information on the implications of tax pooling see Tax Information Bulletins, Vol 15, No 5 (May 2003) pages 64 to 67, Vol 23, No 8 (October 2011) pages 35 to 55 and Vol. 29, No. 5 (June 2017) pages 148 to 149.

Overseas electronic payments

  1. A payment will be received in time when it has been electronically paid or direct credited into an Inland Revenue account either on or before the New Zealand due date.
  2. For more information about making payments from overseas visit www.ird.govt.nz/makepayment/overseas/from-overseas-index.html

Tax transfers

  1. For the rules regarding the transfers of overpaid taxes refer to Tax Information Bulletins, Vol 14, No 11 (November 2002) pages 35 to 47, Vol 16, No 1 (February 2004) page 71 and Vol. 17, No. 1 (February 2005) pages 101 to 102.

Weekends and public holidays

  1. If a due date falls on a weekend or a public holiday, then an electronic payment will be in time when it is credited into an Inland Revenue account on or before the next working day.
  2. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), a payment will be in time if it is received by an Inland Revenue branch office, at a Westpac branch or at an Inland Revenue postal address on the next working day. This treatment only applies to those customers who usually deliver payments to a Westpac branch or Inland Revenue drop box in the province that is celebrating its anniversary day and so are unable to access those sites on that day.

This Standard Practice Statement is signed on 19 February 2019.

 

 

Rob Wells
Manager, Technical Standards