Tax Payments - when received in time (WITHDRAWN)

This statement will also appear in Tax Information Bulletin, Vol 26, No 8 (September 2014).

Introduction

1. This Standard Practice Statement ("SPS") sets out the Inland Revenue's practice for accepting tax payments as having been made in time. It contains several amendments to the previous SPS, particularly in relation to payments by post and payments made at Westpac.  Those changes will take effect from 1 October 2014.

Application

2. This SPS replaces SPS 07/01 Tax payments – when received in time, which was published in Tax Information Bulletin, Vol. 19, No. 2 (March 2007).

Background

3. SPS 07/01 set out when Inland Revenue would accept payments as having been received in time, including:

• Payments by post,
• Electronic payments (from New Zealand and overseas),
• Physical delivery,
• Cash and Eftpos,
• Post-dated cheques,
• Weekends and public holidays,
• Tax pooling, and
• Tax transfers.

4. Since SPS 07/01, the GST and provisional tax payment due dates have been aligned. The objective of these changes was to make tax compliance easier for small businesses that operate in New Zealand.

5. This SPS applies to all tax types, including Goods and Services Tax (“GST”) and Child Support payments.

Payments by post

6. Payments posted to an Inland Revenue postal address, whether they have been posted from within New Zealand or from overseas, must be received on or before the due date.

New Zealand electronic payments

7. Taxpayers may make payments electronically, including by internet banking. 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.

8. Internet payments must be completed prior to the end of the bank's online business hours to be recorded as received on that specific day. Internet payments after these online business hours will be processed on the next business day.

9. In the context of electronic payments, "business hours" means the hours a bank makes available to customers to initiate electronic payments on any given day. Payments made after the bank’s online business hours will be processed by the bank on the next business day.

Overseas electronic payments

10. 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.

Physical delivery

11. Cheque payments will be accepted as being received in time if it is delivered to an Inland Revenue office on or before the close of business on the due date. Payments by cash must be made at a Westpac branch.

Cash and Eftpos payments

12. Taxpayers may also make payments by cash or by Eftpos at most branches of Westpac. Payments can only be made over the counter and the payment is received in time if it is made by the close of business on 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.)

Post-dated cheques

13. Inland Revenue will not bank post-dated cheques until the specified date. A cheque that is post-dated until a date 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 payments that are posted or physically delivered.

Weekends and public holidays

14. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), Inland Revenue will accept a payment as being in time if it is received at an Inland Revenue office, at a Westpac branch that will accept Inland Revenue payments or at an Inland Revenue postal address on the next working day.

15. If a due date falls on a weekend or a public holiday (including a provincial anniversary day), then an electronic payment will be accepted as being in time when it is credited into an Inland Revenue account on or before the next working day.

Tax pooling

16. Tax pooling involves taxpayers 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. It is when a payment is transferred from the tax pooling account into the 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 the taxpayer’s account. The effective date of the transfer can be no earlier than the date the deposit was received by Inland Revenue. For more information on the implications of tax pooling refer to Tax Information Bulletins, Vol. 15, No. 5 (May 2003) and Vol. 23, No. 8 (October 2011).

Tax transfers

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

This Standard Practice Statement is signed on 25th day of July 2014.

Rob Wells
LTS Manager, Technical Standards
Legal & Technical Services