IRD –Support for Businesses
We have received a number of responses from IRD on how they can support Businesses during COVID and these are outined below. Please contact IRD if you need support.
• Write-off penalties, interest incurred due to hardship or reduced cashflow.
IRD can already remit penalties and interest for the reason above if the person is suffering that hardship from COVID-19 impacts. This is a seamless process through the taxpayers MyIR account.
• Extend no interest timeframes for IRD Small Business loans. Write-off loans for hardship.
Currently, the period in which lenders under the small business cashflow scheme have two years interest-free and there is currently no plans to increase this at present.
In terms of the ability to write off loans under the small business cashflow scheme, because the scheme is included in the definition of “tax” the general provisions that are currently available to write off amounts of tax for hardship can also be used for the small business cashflow scheme. So the power is there already.
• Show more leniency for tax payment deferrals, tax payment write-offs for hardship and simplify the process.
This is basically linked to the first point about the ability to write off interest and penalties. IRD prefer not to defer due dates as it is an overly complex process, however, IRD considers options when taxpayers miss payment dates because they are affected by COVID issues. IRD can consider removing both interest and penalties, again, taxpayers can apply for this relief via their MyIR account and this is a user-friendly process (essentially ticking a box).
One thing IRD do want taxpayers to do is to file their tax returns to establish any liabilities as this allows IRD to both assist taxpayers with instalment arrangements if needed due to COVID but also because that information is used as the basis for a number of the government's COVID response measures such as the wage subsidy and resurgence support payment. So the message to taxpayers is to file the information and then IRD can assist in dealing with the payment.
In terms of hardship write-offs, there are existing provisions for the Commissioner to write off tax under hardship which can be used if necessary and appropriate.
Get in touch with IRD here.