Is your business on top of 2017 taxes

Tax department out of action for five days before major tax deadline
February 3, 2017
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Earlier this month, the Government released PAYE Reporting – Better Administration of PAYE, which provides further detail on the changes the Government is looking to make to improve the administration of PAYE.

The proposed changes flow from those outlined in Making Tax Simpler – Better Administration of PAYE and GST, which was released this time last year. As such, the final proposals come as no real surprise. In our view, the changes are sensible and fair and have the potential to provide real benefits for businesses by reducing the steps involved in tax compliance.

The new document outlines the following potential changes:

  • Employers and payroll intermediaries will no longer be required to file an employer monthly schedule; instead they will file PAYE information on a payday basis from 1 April 2019.
  • Employers using payroll software will be able to file their information directly from their payroll system.
  • Employers will not be required to use payroll software but will have to file their PAYE information on a payday basis.
  • The threshold for electronic filing of PAYE information will reduce from $100,000 a year of PAYE and Employer Superannuation Contribution Tax (ESCT) deductions to $50,000 a year so smaller employers will still be able to file their PAYE information on paper if they choose to do so.
  • The Government is no longer proposing to change the dates by which PAYE and related deductions have to be paid to Inland Revenue. However, employers will be able to make these payments on payday if they so choose.
  • To improve the workability of the rules, minor changes will be made from 1 April 2018 to the PAYE rules for holiday pay paid in advance and to align when rate changes come into effect.
  • The payroll subsidy, which subsidises employers to outsource their PAYE obligations to listed payroll intermediaries, will cease from 1 April 2018.

It is expected that the proposed changes will be included in a tax bill due to be introduced into Parliament early in 2017.