Back to Making Tax Simpler
Benefits

Do you agree with these benefits?

Do you agree that

  • Greater convenience;
  • Greater speed and greater confidence;
  • Reduction of compliance effort;
  • Improved, more rapid and responsive customer services;
  • Reducing the cost of the tax administration system;
  • Improved delivery of services across government

could all result from the greater use of digital services in tax administration?

Comments

David Wallace
yes

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  • agree19
  • disagree3
1 year ago
linda akeripa
It's very easy n stress free to be able to check your payments and check other information about taxation and a lot more

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  • agree12
  • disagree2
1 year ago
George Spark
It would be great to have a more direct electronic tax system. However one key element that is often overlooked in the haste to automate, is security. Not just prevention against hacking, but also monitoring of staff access to all data. There is more and more data gathered and stored all the time, but if that data were to fall into the wrong hands it could be used for criminal purposes etc. So hopefully improving data security and implementing world leading processes and multi-layered endpoint and other data security will be implemented.

Do you agree with this comment?

  • agree26
  • disagree1
1 year ago
Kevin
Done well then yes......but a poorly designed and implemented system change could cost billions and deliver nothing! We have all seen this before, so, get it right this time and everyone will be happy. Well someone will still complain but hopefully not too many.

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  • agree24
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1 year ago
Le-roy Staines
EXACTLY. I'm tired of seeing systems that tout themselves as being "simple, efficient, time-saving, etc." yet they are NOT simple. Invest on making it super intuitive and simple to use, as well as flexible and functional, and get it right. Don't fall into the trap of other organisations who let their developers or executives design the user experience.

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1 year ago
Dwayne
The system has to be done sensibly without "customers" being forced to use it regardless of actual compliance costs. Obviously all costs SHOULD be reduced, but any users who do not feel this to be so must have the option of doing their tax offline. NZ Computer Society did some research into government IT costs and the methods used for tendering etc, perhaps IRD can learn from this! Part of it is the whole tendering process but also involves not making the project bigger than it has to be, so a modular system is probably the way to allow a proper roadmap for development. The answer to this question: Only if IRD can do something that few government departments in the world have ever done -- a software system that performs as expected and under budget!

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  • agree7
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1 year ago
Steve Goddard
The digitisation of this information is already here. Our clients are all on Xero, bank transactions are automatically invoiced, supplier invoices are electronically managed using Receiptbank, customer invoices are issues electronically via email or direct link. IRD forms are automatically completed by our Practice Management software There is no paper or manual form filing involved If the IRD encouraged the use of qualified tax agents by all self employed this would achieve all of the aims of this initiative. The infrastructure is already here and being used.

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  • agree16
  • disagree16
1 year ago
Dwayne
Automatic filing may be great for corporates with full time tax accountants, but so many assumptions!! Sounds like Mr Goddard is one of those "qualified tax agents" pushing his own barrow. SME companies may be reluctant to hand over interim financial data to IRD without it first being checked by their accountant; anything that needs to be adjusted for the end-of year reports is likely to trigger lots of IRD questions about variances and wasted management time revisiting problems that were solved at the proper time -- end of the tax year. Sole traders do NOT need the arrogant attitude of professionals who want to be paid to calculate tax on small amounts of income that is by no means regular or guaranteed. Their income sometimes stops completely when the work dries up, so contractors like myself don't need another layer of fixed costs that still have to be paid on schedule while their income goes up and down in cycles. However, contractors also don't need complex rules about what can and cannot be claimed as expenses, or non-intuitive ways of calculating them. Just because accountants love Xero does not mean very small businesses want to add overheads like monthly Xero fees to their other expenses. I have asked the Xero rep whether they could introduce a lower cost plan for contractors, more in line with the requirements and income of a sole trader, and they aren't interested. Maybe you can convince them!

Do you agree with this comment?

  • agree9
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1 year ago
Denise Gordon
I don't totally agree with relying only on electronic methods, when our computers malfunction and we are so reliant on this technology everything grinds to a halt. I have a lot of issues with connecting with the IRD website, it often dumps me out and I waste a lot of time retrying to gain access to file tax returns. I think that the IRD needs to look at the amount of online services it is currently offering and to improve the computer platform this is all sitting on before offering more services via online filing etc.

Do you agree with this comment?

  • agree21
  • disagree5
1 year ago
Sue
Any new digital system would need to be user friendly, with easy to understand information. Currently difficult to find relevant and up to date information. Response times would need to be more efficient and effective. Information needs to be upfront and accurate on website. All contact needs to be acknowledged, with efficient time frames of response.

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  • agree19
  • disagree2
1 year ago
futurenz
The website also needs to show more clearly whether the tax payer is up to date on provisional payments, instead of showing transaction dates on some screens without due dates. Especially confusing is the fact that provisional tax transactions show the balance as "overdue" even before the due date, and IRD charges the provisional tax 6 months ahead of the actual tax instead of being more in line with when the expected income is actually earned. This whole provisional tax system essentially comes out of my bank overdraft or Visa and costs me 20%!

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  • agree2
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1 year ago
Grant
Would be a good step forward, but there are still many thousands of small business that use "basic" accounting applications (which suits their needs and costs very well). Therefore an open source type interface needs to be developed so that these firms are not forced in to new and expensive software applications.

Do you agree with this comment?

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1 year ago
Rebecca Phillips
This is also true for MANY small Not-For-Profits. There needs to be an option for them to continue with their manual systems or adequate but slightly-out-of-date versions of MYOB. Anything that complicates life for NPOs is not good, and certainly the likes of Xero is well out of the range for many of them. NPOs may not need to do provisional tax, but they still have PAYE and GST to contend with.

Do you agree with this comment?

  • agree1
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1 year ago
Leo
Being an employer of 1 person, I file monthly returns relating to PAYE, KiwiSaver, and ESCT etc. Seems to involve 3 forms to create. Surely one form could be designed to capture all this information!

Do you agree with this comment?

  • agree10
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1 year ago
Alan Keate
Your system is advertised as being simple. I could not even get started and will continue to use the paper system !!!!

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1 year ago
Brian Byers
Why not link Provisional tax payments to G.S.T returns? Rather than the ratio method if a simple adjustment sheet was attached to the G.,S.T return that made allowance for non G.S.T expenses (wages etc ) or other adjustments necessary such as a capital purchase then the provisional taxpayer would have a fairly accurate profit( or loss available on a two monthly basis on which to calculate the provisional tax due Far easier to pay provisional tax on an up to date figure than an estimated figure from a purely arbitrary uplift law! That is the principle but I feel that it has significant benefits for the majority of small businesses(whether they be companies, partnerships, individuals etc. THERE SHOULD BE NO DIFEERENT PROVISIONAL TAX RULES FOR DIFFERENT ENTITIES!

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  • agree20
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1 year ago
Lance Hill
Completely agree - Ratio is better than standard provisional as it is based on ACTUAL turnover, rather than a guestimate based on historical data. In a young company, income is likely to be sporadic and have more severe peaks and troughs. What would amount to close to a form of PAYE for the self employed, would be a welcome relief instead of having to budget thousands in PT based on a VERY good year, when one is not having a year anywhere NEAR that turnover. Yes, it must also take into account the expenses etc and yes, I believe one rule for all also. It may make it a bit hard on the LAERGER firms to do it this way, but the one-man-bands (of which there are MANY in this country) and the small business owner (I believe) would find it MUCH easier to manage the TAX burden as the money is EARNT rather than making sure it is still there to pay tax with after some twelve months or more have elapsed since it was earned.

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  • agree6
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1 year ago
futurenz
GAP does make sense for sole traders that are GST registered, but should allow more time to pay the provisional component eg spread out monthly across the tax cycle. However its important to retain the option to be on 2-monthly or 6-monthly GST returns for people who aren't employers because they have to use their downtime for doing the accounting, otherwise they are forced to take time off work to do tax returns instead of actually earning the taxable income.

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  • agree0
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1 year ago
Chris Aspinall
Anything to make it simpler, not sure about monthly payments calculated as you go cos there would be a lot more admin costs rather than one annual one. 6 monthly would be a help.

Do you agree with this comment?

  • agree5
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1 year ago
Cara Davey
I do agree in principal but as always it is more about how well it is done than the theoretical benefits. I have done my personal taxes on my own for ten years. The last few years I have used the IRD website and it is a vast improvement to a paper system in terms of response, speed, transparency and ease. Having said that, the website could have several functionality improvements and be more intuitive.

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  • agree14
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1 year ago
ion
No, there are still as lot of people who have neither broadband or cell one coverage

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  • agree3
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1 year ago
Derek
As a sole trader with no employees I am happy with the current system. I don't want to purchase accounting software and I don't want to interact with IRD in any way or more often than I do now. As other people have said one size doesn't fit all. For me the system is not broken so there is no need to fix it. Fixing an unbroken system only adds costs to the tax payer.

Do you agree with this comment?

  • agree22
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1 year ago
Toni New
I have used the internet site of Inland Revenue for some years now and agree it lags behind and seriously needs upgrading before any changes can be made. Once done then viewing information and inputting our own tax info will surely be easier and faster than waiting on the phone along time to get a personal attendants response so please be quick in updating to meet modern demands.

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  • agree4
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1 year ago
Toni New
The benefit of a better internet system would be great a non paper based system is surely the way of the future we all spend a lot of time online and this system with big improvement though would be great. As it is it is really hard to navigate in and really slow at the busy times of the month sometimes not letting people in for hours so upgrade is essential to ensure a way better system people can use.

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1 year ago
Peter Fitzsimons
Greater benefits for some people in some aspects. Make the options available for people to us if they wish. For various reasons, especially older accounting programmes, may not interface properly

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  • agree4
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1 year ago
John Gillanders
Absolutely! This kind of approach is well overdue - bravo for focusing on this now!

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  • agree3
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1 year ago
peter fitzsijmons
I don't agree with all of them, expecially the ones that involve compulsory. IRD should make digital collection platform available for people to use as they want to. There are all manner of different ways people do business, and proprietors should not be forced to use particular technology if they don't want to. They should also not be required to pay accountants etc to do it for them

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1 year ago
Ralph McCleery
This revamp/reform is long overdue. Being Australian owned, our parent hosts our enterprise (accounts) system which we connect to via an internet based private VPN. The idea of being able to implement an API to take care of taxation compliance and reporting is very appealing especially if it leads to a "pay as you go" tax system. The only hurdle I see is the cost of implementing the integration.

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1 year ago
Hilary McKenzie
An upgrade of the technology is definitely needed but we have to make sure that this does not outpace improvements to internet access nationwide and does not deprive small business with out a technology knowledge base, of access to service.

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1 year ago
Stephen
These are aspirational benefits. What are the concrete examples of them ? Tax is a complex and subject to changing interpretations. Many examples of binding rulings not being so - and IRD not willing to make a ruling to preserve its tax options. MAKE tax simple. Don't just add lipstick to a pig.

Do you agree with this comment?

  • agree5
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1 year ago
Paula
Ongoing calculation of provisional tax could result in a lot of extra time on-line to IRD. The current system only requires it to be done three times a year. The danger with increasing use of digital technology is a massive waste of time, particularly with technology failures. Example the current IRD call back system which cannot call through a telephone exchange to a phone extension without DDI, or the Companies Office site which cannot be accessed using Google Chrome. These things are only discovered in spending time trying and failing to use them. The suggested "improvements" are unlikely to assist anyone but large corporates who have the digital infrastructure and staff to deal with the extra compliance - which has been shown in the past to be more likely than any reduction.

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  • agree6
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1 year ago
lyndsay@balancingbooks.co.nz
I do not agree that the IRD should have direct access or links to accounting software, this is a private service between the client and their accounts person. Very against this type of big brother spying.

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1 year ago
Marc Wilson
Seems obvious and overdue to me

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1 year ago
Malcolm
Linking provisional tax to income as you go is clearly naive. I'm no tax accountant but as I see it, taxable income incorporates business costs, including money spent on wages and related income tax, Kiwisaver etc as well as revenue. So basing prov tax just on income flows could jeopardise cashflow in many small businesses. Even linking prov tax to GST returns is fuzzy logic, as not all business costs have a GST component eg wages. If a revenue lift is based on increased employment and therefore wage bill, you wouldn't want to see more tax sinking through the floor while your net surplus may shift little. I'll prefer to let my accountant monitor my position and advise when and if more prov tax should be paid to avoid UOMI. Sucking more $$ out of a business steadily during the year would negate the advantages of the provisional tax system in allowing businesses to manage their cashflow, invest in capex etc.

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  • agree10
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1 year ago
Chris Peace
It sounds good but security will be paramount. Very nice for taxpayers to reduce compliance costs and for IRD to, presumably, reduce staff costs. But who will pay when a denial of service attack brings down the IRD website? The "contract" for service between IRD and users must set out each the rights and responsibilities of each party somewhat like the banks are now obliged to do.

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1 year ago
Kerstin
I work for a commodity company which has very lumpy sales and expenses. I am worried that linking provisional tax to GST turnover will result in paying too much tax. Eg We have had sales contracts suddenly stop and no sales for months. Would we get Prov tax credits back in those GST periods of no sales? How would the GST/Prov tax calculation allow for stock on hand and non GST expenses? We currently estimate provisional tax and that works ok, as we prepare monthly accounts and annual accounts straight after balance date, and can adjust final Provisional tax payment before May. Just wondering if the proposed system will lose some flexibility which is already built into the system for company accountants. Is it a proposal which is better applied only to selected small businesses who have relatively simple cash flows and don't want to spend too much time working out their tax?

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  • agree5
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1 year ago
William Russell
Absolutely support a pay-as-you-go change to provisional tax. Current system is onerous, and fails to recognise small-medium businesses which have delays in client payments. The tax can be due before the money is received which creates further liabilities on an individual or company.

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  • agree5
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1 year ago
Richard
I'm a sole trader with a VERY simple business - one main client, very few expenses. I just want to be able to pay my tax as I earn it more like PAYE. If I can work out my GST every two months, why can't I do the same with my income tax? I've also just started full-time study so my income will drop significantly. It shouldn't be a big deal to reduce the tax I pay as my income decreases. The same goes for secondary tax rates. Why should I have to over-pay tax for a year just because I have another source of income? IRD needs to lose the legacy of last century. This initiative is a great move.

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  • agree7
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1 year ago
Ross
For a long time now there have been discussions on a better tax system for the self employed, a PAYE system will be easier for many, especially for people in my situation where earnings can vary so much, if I earn a lot one year I am penalised the next in a provisional system, I get it back eventually but that should not be so, introduce it very soon before I retire !!!!!

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1 year ago
Robin Johnstone
I would be happy to use a pay as you go system that can accommodate fluctuating income. I agree with other peoples comments about systems that tout themselves as easy and in fact are not. To make a good system the specification should include a preview online trial that customers can test and comment on to get a easy to use system free of errors. we don't want to end up with issues like the NOVAPAY system did.

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1 year ago
Paul Miller
Yes. Being able to keep up with provissional tax payments as we go, would make much more sense and make things much more accurate rather than trying to predict the future as every year in my business if different

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  • agree4
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1 year ago
Tony Thurston
As a non Xero user which seems ...anyway... : From my experience - Problem : IRD website is not user friendly but the functionality is good once you actually get to where you want to be. In basic terms - the IRD website has a dud interface. Example : Try to find where to re estimate earnings for provisional tax. If you do this within 3 minutes your IQ is (x)+....or maybe my IQ is (x)-. Solution : Create a user friendly, easy to follow interface. This just involves logic and common sense and not a lot of cost as you are really just re designing the front or link web pages - no back end stuff. Problem: Provide a free accounting package to small business users - something very similar to Xero, that aligns directly to the IRD website functionality as that is why it was created. Solution : Create a package called Zero - as in no cost - and distribute it to small businesses. Eventually it would be compulsory to use this. You'd need to take a ten year view - but in the long run this would save money.

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1 year ago
Mark McGinn
Who wouldn't agree with that lot. The real point is would we be happy with wrestling with a whole lot of unintended consequences of change to the status quo because IRD intended well, but executed badly. That's reasonably typical in both public and private corporates and its the end of the line customer who bears the brunt of stuff ups.

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1 year ago
Chris Walley
Firstly, actually asking all the users via the very medium you are planning to use is a very good sign and first step. Secondly, it is possible that the people visiting this sight and writing and replying are highly likely to be the type of technically minded, forward thinking types who would be very positive about digital enhancements anyway. You may be missing the die hard paper users out there that really ought to be the converts you need to aim at. Lastly, I would very much appreciate a better system that can align and simplify my returns. GST 6 monthly, FBT quarterly, provisional thrice yearly is a bit of a juggle sometimes and I have missed one or two before. Offering choices and alignment options would be great.

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1 year ago
arthur loulanting
i agree

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  • agree1
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1 year ago
Greg
I am not in favour of compulsory anything!! We recently got rid of the nanny state fanatics and we don't want them back! Improving the existing system would be a great help, and there is already provision for those who choose, to pay their GST and prov tax regularly, based on GST return if they desire., This is obvious great for those who are unable to mange their money or plan ahead and I agree very good for one man bands. The idea of anyone including Govt having access to my personal accounting I FIND ABHORRENT! History has shown that security breaches are common, and opposition business would love access to competitors books. I have already seen where a customer went broke due to an ird employee sharing info with his competitor, after an audit, that competitor stole his product design and the rest is history. MAKING THE PRESENT SYSTEM more user friendly and making more choices to cover different styles of accounting and business activity would go al long way, and if these changes are user friendly, save time and are helpful, without nanny state tactics, people will naturally choose to use them. We all want to save time and money!

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  • agree10
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1 year ago
Niki
I'm very keen to see greater efficiency through use of technology with IRD.

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1 year ago
Laureen Goodger
Would love to be hooked up directly to IRD and have GST etc made easy.

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  • agree3
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1 year ago
Anthony Kermode
Paying tax in installments along with GST would simplify things, however the frequency may be a problem for Government. GST thresholds govern frequency of returns, but the same thresholds do not apply to income. If it means paying as you go then if income was say monthly rent, tax would be payable each month, yet GST may be every 6 months. The extra interim returns would be a cost to the business that would be avoided if for small businesses interim returns coincided with the GST returns. Adjustments would still be required for depreciation etc on an annual basis.

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1 year ago
eileen
technologies are wonderful when they automate a well-designed process in this case that focuses on providing an effective and efficient service for business owners to meet their tax obligations. Ask real users how the process needs to work to simplify first then automate the most relevant steps. PAYE is very complex to use - jumping in and out of different parts of the website to do calculations, find numbers etc. And is often "unavailable". This would not be a good example to present to motivate businesses to use income tax payments automation. And the PAYE payment through banks is so fragmented - one transaction for each component of PAYE. One monthly payment distributed to all sub payments according to the forms submitted would be ideal. Also PAYE still sends huge numbers of paper reports by mail - that seemingly have no relationship to the documents originally submitted and takes inordinate amounts of time to reconcile. Any process that requires more work by business owner and more accountant's fees for income tax payments would not be appreciated. Interim tax payments could voluntarily reflect actual business or projected business based on previous year - the business is still responsible for payment.

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1 year ago
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