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Direct crediting of GST refunds

Do you think it should be compulsory for refunds to be direct credited?

Currently most people receive GST refunds through direct credit (about 2/3rds of refunds) or cheque (about 1/3rd). Direct credited refunds are generally available to the customer within 3 – 4 days. Refunds through cheques take about 10 days to become available. The Government proposes that GST refunds only be paid by direct credit, except where the customer would experience undue hardship or payment into an account is not practicable.

Question   

Do you support the proposal that GST refunds should only be made by direct credit into a customer’s nominated bank account unless it would cause undue hardship to a customer or is not practicable?

Comments

David Williamson
No, it should not be compulsory

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  • agree8
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8 months ago
Haydn J
No. It should remain at the option of the taxpayer.

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8 months ago
Joyce Glennie
Yes, I support GST refunds being paid directly. It is quicker and easier - the post is so slow these days!

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  • agree18
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8 months ago
Peter Huebner
Wrong answer to the question: the option is available already. The question is if it should be made compulsory which would ONLY place hardship on those who are not set up to receive a cheque in the mail. It would make no change at all to 85% of the rest of us who already get it credited directly.

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8 months ago
Fiona Cargill
GST refunds being paid directly will certainly save time and money. I support this.

Do you agree with this comment?

  • agree11
  • disagree6
8 months ago
David H
When setting up systems, ensure that they can cope with otherwise unforeseen events. Compulsory use of direct credits means total reliance on IRD computer and internet banking systems. It also requires technical capability for the small business. In the event of failure of any of these, cyber attack etc., there is no fallback position. Direct crediting is good and efficient, but it should not be compulsory.

Do you agree with this comment?

  • agree4
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8 months ago
Lyn
I would imagine all business would have a bank account and direct credit is the quickest way to receive refunds. I do not see why this shouldn't be compulsory.

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  • agree23
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8 months ago
Delwyn Shaw
I agree. I can't understand why people would want to wait for a cheque to arrive in the mail and then take it to the bank and wait again for it to be cleared. Direct credit of refunds is so much faster and the funds are often available within a day or two of the GST return being filed.

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  • agree11
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8 months ago
Mon
I think it should be strongly encouraged. From personal experience I feel there may be a fall down where an Accountant processes transactions and does not provide bank account numbers to IRD for refunds.

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8 months ago
John Tait
I think all refunds should be by direct credit. At the very least please make it the default option.

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  • agree8
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8 months ago
Peter Duynstee
I agree. Whereas I am hesitant about making it compulsory, I think direct credit should be the default option. Yes, every business has a bank account where it could be deposited into but I have seen some (very) small businesses which have incredibly antiquated admin systems.

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7 months ago
michele hunt
Why should it have to be compulsory? Many people still use cheques

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8 months ago
Simon
Yes, I would support this. Lower costs all round, faster, much more secure

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  • agree5
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8 months ago
Di
No it should not be compulsory.

Do you agree with this comment?

  • agree3
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8 months ago
Peter R
Our organisation already receives GST refunds direct credited into our bank account. This works well and the refund is received much faster. I believe the IRD should try and achieve up to a 95% refund rate using this method. It saves people having to go to their bank to deposit the cheque then wait for it to clear. There will always be a small % of people (5%) who will still want a cheque, but direct credit will save time and money for the IRD and taxpayers.

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  • agree6
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8 months ago
Lesley McNeil
I agree that returns should be done on line and I do them it is great!- I do not agree with direct payments because like me a lot of people are commission only and sometimes those commissions may be one or two days late. Can be very difficult I do not direct debit payments for anything, I like to have control of my payments

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  • agree3
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8 months ago
Robert C
Lesley you are confusing the direct debit of payments due to Inland Revenue (I agree these should not be direct debited for the reasons you have stated) with the direct credit of refunds owed by Inland Revenue to you the registered person. When these were sent out by cheque it could take a few days to over a week before receiving, getting to the bank to deposit and then awaiting clearance before having access. With direct credits they are available the next day after release by Inland Revenue.

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8 months ago
Robert C
Yes - prevents it getting lost in the post and is available straight away within the bank account as clear funds.

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8 months ago
Alan Willoughby
Why not? It is certainly the fastest and most efficient way of paying GST or receiving refunds.

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8 months ago
Helen G
YES. YES. It''s business funds, not personal, so it should be recorded in the business bank accounts.

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  • agree3
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8 months ago
Ronise Paul
Yes definitely, cheques are becoming obsolete!

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  • agree3
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8 months ago
Peter Huebner
It's already available as an option. In fact the majority of us USE that option. Making it compulsory is not going to benefit anyone. It is merely placing hardship on those who, for one reason or another, choose to receive a cheque in the mail instead of getting a direct credit. HOW is this supposed to be an improvement? It isn't. NB: I jumped on the direct credit bandwagon as soon as it became available. I like it. It means I get the money showing up in my bank balance 14 days sooner than if I had to wait for a cheque and then bank it personally. But making this COMPULSORY for people who don't want it, is in no way making things easier for the taxpayers. It is not an improvement, it's the very opposite.

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  • agree5
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8 months ago
Trish
I support refunds being direct credited to the bank account. So much quicker, more reliable, and no cheques sitting in drawers waiting to be taken to the bank which now takes even longer to process them. The option for an alternative in certain circumstances should be retained but direct credit should be the first default option.

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8 months ago
Ian Anderson
Currently the tax payer chooses and it is unclear why anyone would choose to get a cheque. But before that option is removed, surely the correct question to ask is "why do you choose to get your GST refund by cheque?" (obviously only send this question to people who choose that option). Then you have some information to make your decision.

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  • agree5
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8 months ago
Aston Distribution
I would support the proposal as it is in line with current practice in many businesses now and the option to receive by cheque would still exist but only under hardship for those that need it. If it saves money and time then why not.

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8 months ago
Robyn N.
I'm fine having any refund going to a bank account.

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7 months ago
Mark
It should be optional

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7 months ago
Andrea
No

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7 months ago
Bernadette
Why can't the client choose? No I don't think it should be mandatory.

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  • agree2
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7 months ago
Zany
Yes

Do you agree with this comment?

  • agree5
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7 months ago
C Forster
I f payment of refunds can only be made by direct credit to the bank account then we should be able to pay by direct credit to Inland Revenue.

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7 months ago
Aaron Marshall
You can, via internet banking.

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7 months ago
Hilton
Seems hard to believe there are still those wanting a cheque in this day and age but I guess they have their reasons. Make direct credit the default such that those who really want a cheque have to ask for it

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  • agree3
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7 months ago
Dennis Thomas
I sure do. The transaction costs of cheques etc make this sensible; plus the faster, secure and traceable receipt of refunds makes the system more robust.

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  • agree4
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7 months ago
Sherida Lee
Direct credit of refunds would save me a trip to the bank...50 kms round trip for a start & post is very slow where I live.

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  • agree2
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7 months ago
Theresa
Cash flow in small businesses is a key concerns so yes like the idea of GST refunds being electronically transferred.

Do you agree with this comment?

  • agree4
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7 months ago
Aaron Marshall
It would depend on IRD's policy of acceptance of a refund being full and final. If there was any dispute of the amount (in the case of IRD making adjustments); is there a mechanism of altering the refund, or would IRD deem acceptance of the refund as a 'final settlement'?

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7 months ago
Lyn
Good point Aaron - I hadn't thought of that as haven't had a discrepancy to date - ooooh leaving myself wide open to one in the near future!!!

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  • agree3
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7 months ago
Judy Lewis
I have never understood why direct credit isn't already used. Cheques are just a nuisance, requiring a trip to the bank.

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  • agree5
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7 months ago
Al Hanline
I see no reason why not. It has definite advantages - It is less admin and less risk

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  • agree4
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7 months ago
Dan Harman
Why wouldn't you want the money direct credited? Keep it simple and make the change already.

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  • agree4
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7 months ago
David Close, Treasurer, Anglican Parish of East Christchurch
I agree that GST credits should be paid direct into a bank account. It works well for us. Making it obligatory would not cause hardship.

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  • agree3
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7 months ago
Jeff S
Yes, GST refunds should be paid by direct credit. Having to wait for a cheque and then take it to the bank is a pain.

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  • agree2
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7 months ago
Financial Adviser
Direct credit is the easiest and most cost effective way to ensure the refund is paid to the company. Cheques are very outdated.

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  • agree3
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7 months ago
Ivan T MiPrivaci
Definitely voluntary. Cheques offer more flexibility in terms of which business account the funds can be placed in. This is sometimes useful if the business will be in a state of temporarily low cashflow and the owner doesn't want any refund swallowed up by bank fees (but directed instead to where it can be most useful).

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  • agree2
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7 months ago
Max Thomson
I agree that GST refunds should only be made by direct credit into a customer’s nominated bank account unless it would cause undue hardship to a customer or is not practicable, as long as there is a generous interpretation of the "undue hardship" and "not practicable" clause.

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  • agree4
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7 months ago
Patrick
Direct credit should be default option. But not compulsory. If someone wants cheque for whatever reason they should be given that option.

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  • agree3
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7 months ago
Graham Sharp
Direct credit should be the default. It should ask you to confirm the default payment bank account each time (not re-enter it, just confirm the account held in my profile). There should be an opt out option to be paid by cheque, with an associated drop down list of valid reasons to choose from. A third option should be to have it directly applied to any other specific outstanding IRD debt.

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  • agree2
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7 months ago
Ewen McNeill
I agree with others that refunds by direct credit should be the _default_ option. But I think I would stop short of making it the only option available. Perhaps IRD could look at other measures that would _encourage_ taxpayers to receive their refunds via direct credit. Ewen

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7 months ago
PeterD
I think it should be made compulsory. The only issue I have is that the IRD need to sharpen their act up when it comes to processing PAYE payments received from tax payers. They have a habit of transferring GST refunds to PAYE & related taxes despite the fact that you have paid these on time, but have not allocated them to the appropriate tax types (this is despite payments being coded at source for each tax type) You then end up spending a considerable amount of time on the phone to them trying to tidy up the mess.

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  • agree2
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6 months ago
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