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Should employers be required to notify Inland Revenue when they start or cease to employ?

Employers are asked to inform Inland Revenue when they decide to employ staff.  This allows Inland Revenue to provide them with information about their obligations and to set up their contact details.

In the future it is proposed that payroll software would include an option to notify Inland Revenue of the decision to become an employer, and to permanently or temporarily cease to employ staff. This would eliminate the risk of an ex-employer being pursued for failing to file PAYE information, and the need to file nil returns.

Questions

1.  Do you support the proposal that employers should notify Inland Revenue of a decision to commence, temporarily cease or permanently cease to employ staff?

2.  Should these requirements be included in legislation?

Comments

Jill Sheppard
Advising IRD of new/departing employees would be a significant compliance cost - onerous if company has a high labour turnover.

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8 months ago
Haydn J
Your introduction/problem definition does not match your question. The introduction talks about payroll systems having an option to advise IRD that the employer has started or ceased employing. This seems like a nice idea, but is hardly a major issue. Your question asks whether it should be mandatory to advise IRD that an employer has started employing (no mention of a payroll system). I assumed this was compulsory, how else does an EMS get issued?

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8 months ago
Administrator
Thank-you for your comment. While new employers are currently asked to advise IR of a decision to begin to employ it is not a legal requirement. A blank EMS can be downloaded from the IR website or the new employer could file using an on-line option. The question does not refer to a payroll system as advising IR of the decision to become an employer could also be done on the telephone or through the Companies Office.

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8 months ago
Software training contractor
I support it, as it'll save a lot of mail after the fact.

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8 months ago
Lyn
Yes I support this - but how would it be done? In my experience it is not always easy to phone and speak with someone who has good advice or makes sense. And these days, it is hard to make a phone call that does not take hours to get a "personal" response. I feel it would need to be easy for people to phone IRD in these instances of staff changes - then it would be a practical idea - and everyone could be better informed.

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8 months ago
Delwyn Shaw
Being able to register as a new employer and advise of temporary or permanent ceasing to be an employer electronically would be great. Yes, there should be a requirement to advise IRD of these changes so they know whether or not you need to be filing returns and paying PAYE, etc.

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8 months ago
michele hunt
It seems to make sense to have on option on the my IR form to indicate new or departing employee and I don't think it is an issue to make this compulsory. it would be onerous if it has to be done separately to the PAYE forms

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8 months ago
Suzanne Ashton
If this notification could remain as part of the EMS schedule process that would suit us best. Its just so easy to put a new employee's start date and finish dates on here, why add an extra step or make it 'law'? I can't see any benefit.

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8 months ago
Catherine Solari
If this could be as simple as a tick box or notification in your online payroll system then it would not be a problem.

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8 months ago
Fiona Palmer
IRD already receives the information that a new employee has started or finished via the EMS. It would be onerous to have to separately advise them that an employee has finished or started. We use a lot of casual staff over the Christmas period and they may then work for us intermittently during the year. I can just put them into the system for a couple of weeks here or there without having to make any special notification to the IRD.

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8 months ago
Bernadette
Totally indifferent to this... its not a big deal to notify. But what's the problem if people don't? Legislation for the sake of it is never a good thing...

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8 months ago
Financial Adviser
No

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7 months ago
Rene
IRD should know who, when and where staff are employed. Legitimate firms have nothing to fear.

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7 months ago
Antje
There should be an option to notify IRD but it should not be mandatory, and it should not be legislated as both would increase compliance cost, and this proposal makes out to be about making things easier for business.

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7 months ago
Mario Becroft
This seems like nothing but an unnecessary extra burden on employers, especially with casual staff who may start and stop employment from time to time. If I include an employee in my IR345 for a given month (or other pay period) then that person was employed. Nothing more need be said.

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6 months ago
Nikki
Yes I think that the payroll system (or manually through IRD website for non software users) should notify the IRD when employees commence or cease. I struggle with the current process of the employee choosing their tax code (rather than the IRD advising the employer) and then at the end of the year companies fighting to obtain a tax refund for individuals whilst taking a nice cut. If tax was worked out correctly through the year then there would be less refunds and therefore less expense for the IRD.

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6 months ago
Martin Etherington
I've always found (since electronic filing became possible) that the need to have a separate registration as an employer to be unnecessary and outdated. All the information about obligations is available on the web site these days, and the business contact details will already be known (from other tax types). Given the current system, surely the act of filing an EMS which advises IR of new employee's and their earnings, etc. is sufficient to 'register'. And surely the act of filing an EMS showing all remaining employees have ceased is sufficient to show that the business is no longer or temporarily not an employer. Under the proposed system of filing each pay, the same logic applies. Under both the current or proposed systems, if IR has no record of any current employees then no EMS or filing should be expected and no penalties issued for supposed late filing. This means that the option to file via myIR should always be available to any business without any need to register as an employer to have it available. (My comments also assume there is no paper option for filing, otherwise IR does need to know when to start sending paper forms and when not to send paper forms. If paper is still needed as an an option, employers could indicate or request this via myIR rather than a separate registration process ).

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5 months ago
Susan
Current notification via EMS is sufficient to advise IRD when an employee starts or finishes. Don't make it more onerous for an employer to notify IRD more regularly than monthly of any employee changes.

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5 months ago
Chris Mar
I don't think it is necessary for an employer to notify IR that they are commencing employing people. If the employer is using payroll software, the first time that employee information is submitted through the EMS or whatever this may become should be sufficient for IR to then mark this entity as an employer. It would however, be useful to allow employers to let IR know that they are ceasing or temporarily ceasing to be an employer to prevent having to file nil returns or be pursued for not filing schedules. In either case, I see this as an operational issue and need not be legislated for.

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  • agree3
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5 months ago
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