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Business accounting systems interacting with Inland Revenue

Do you support linking business accounting systems to Inland Revenue?

The Government proposes that business accounting systems be able to interact with Inland Revenue systems directly. This would remove the need for people to take information out of their accounting system and enter it on an electronic or paper GST return. It should reduce the effort and time spent on filing GST returns and also some sources for errors and problems – Inland Revenue receives a lot of returns which are incomplete, contain errors, or are unreadable. This creates extra work for both Inland Revenue and those who filed the return.

The Government thinks the process should not be fully automatic, but be a deliberate step requiring the person operating the accounting software to click a “submit GST information to IR now” step. This will ensure they have the chance to check the information is true and correct before it is submitted to Inland Revenue.

A significant number of GST-registered persons use third parties, such as tax agents, tax advisors, accountants or bookkeepers, to help them with meeting their GST obligations. Generally, the proposal is expected to provide the same benefits to third parties submitting GST information on behalf of their clients as they will for GST-registered persons themselves.

Questions

1.  If you could submit GST information directly from integrated accounting software in the way described above, would this reduce or increase your compliance effort and costs?  If you can quantify the amount please do so.

2.  Are there additional issues which need to be considered when thinking about how the proposed new digital services would work for third parties, such as tax agents, tax advisors, accountants and bookkeepers, in relation to the provision of GST information?

Comments

Richard
I do not use a proprietary software for GST, so would be unable to use a direct link. I doubt I would be keen to do so if I did. My sister is another small business owner and she does not use electronic means for any financial transactions, and will not be wanting to complete GST on line. It is unfortunate that you are not canvassing the opinion of her and others like her that have limited or no electronic presence.

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7 months ago
Sandy Baldwin
I work as a real estate sales person. I work on commission basis only. When I get paid for a sale of a house the tax is automatically taken out. However with the GST I am paid the GST and on a 2 monthly basis I deduct my expenses from the GST and then have to pay the rest to the inland revenue. Would it not be easier for the agency to submit the amount GST to IRD directly then I can submit my expenses on the two monthly basis receive any credit owing directly into my bank account. I find, and I know other sales people feel the same, that putting aside the GST can be very difficult and we tend to use it in tough times. At least if it's paid directly to the IRD we can't touch it. It would save the IRD endless time trying to retrieve GST money owed. Plus totally up to us to lodge our expenses if we want it. The agencies already take out the withholding tax so why not the GST. As far as I'm concerned a far better solution for both parties. Thank you. Sandy Baldwin Real Estate Sales Person.

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7 months ago
Mandy Cashman
I think if you are already running a software program that creates GST payable then having that program automatically populate the GST in the Inland Revenue website (or however it would work) is a no brainer. At present I have to print off the details and then manually enter them into the IRD website, which is both time consuming and open to errors, whereas direct population from the accounting program to the website would eliminate both those problems.

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7 months ago
JB
Would be interested in an option to file electronically. Would need know the views of our software provider (Cognito/MoneyWorks) as to what that would entail for them. It would probably include some extra process steps to be able to make the relevant manual adjustments each period, and facilities to manage confirmation of delivery and/or re-delivery as and when networks or systems fail to connect (it happens!) Benefit would be a minor convenience. Estimated savings would be about 5-10 minutes per 2 months, plus reduced risk of transcription errors (impact perhaps 1 hour/per year).

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7 months ago
Phil Bang
I am in favour of being able to send GST forms directly from Xero, however, I don't think it should be mandatory for those people without the relevant software.

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7 months ago
Sophia
First of all, do not frenquently maintain the system between 19th and 23rd every month, especially when you have a deadline for PAYE and GST. At least 6 months every year, when I tried to fill a form online, it shows that website was in maintenance and not not available. Then it will save most of the time if IRD system can calculate all the PAYE numbers automatically, and, please develop the function to save employees' name and details instead of input everyone again and again every month. Looking forward a new system, or a software for PAYE, not GST.

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7 months ago
Bernadette
Yes this would be great. Currently I print out the GST return from my accounting software, and then type the info into the online IRD form. Pushing the button to send it straight to IRD would save time (although only 5 mins to be fair...).

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7 months ago
A. Harindranath
I maintain my small business account in a spreadsheet and am comfortable with the existing system of filing GST Returns. I am not interested in buying / learning another software. However I would like to get the on-line filling of GST returns more user friendly. For example if you make a wrong selection in the beginning like "No GST" option, it will be nice to get a warning. If the income is only from overseas source and hence no GST to be paid, the user is likely to select "No GST" option and the further entry boxes will not allow you to enter any figures. It will be convenient if a warning box appears, so that we could go back and make the correct selection as Calculate GST from".

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7 months ago
Angela Walker
They have to remember that not every one can gets broadband and are still on dial up.

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7 months ago
Graeme Flett
Any new system needs to take account of the filing of multiple GST returns i.e. Some of one of our returns may be a debit and one a credit return but the current paper system seems unable to cope with a cheque that covers the difference resulting in us getting a nasty for one of them.

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7 months ago
Zany
No, my business is so small I do not have accounting software and do not intend to purchase it. All records are kept manually.

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7 months ago
Kate
Like other people have already mentioned - this seems to be change for the sake of change - great for IT people to make a bit of money training people how to use it perhaps but of no great benefit to the majority of small businesses. A lot of us still use manual paper filing - for some it is just personal preference, but for others (most of whom you will not see commenting through this forum) the fact is that they could NOT do it all online even if they wanted to due to dodgy internet connections or even a total lack of internet in their area. This should totally be an option available for those who want to take it up and let the rest of us do what works for us.

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7 months ago
Andrew
I am happy with the current system where I complete a cashbook for business and tax purposes and then file the return separately on line. I use a program that is not mainstream and would oppose compulsory use of it to send information directly to IRD. Our business is very small with most transactions GST exempt.

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7 months ago
Vivien Gleeson
I really like doing our GST through the IR website and have since its conception. I have no problem with an automatic link from software to IRD for returns as I have to enter all of our data into MYOB, print it out, go to IRD website and re-enter all of the info again. If it is a one stop shop then I think it could be a great time saving option. We have two GST returns to complete each period, both of which are small business's but the time saved would be a huge advantage.

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7 months ago
Annee spencer
same here

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7 months ago
Annee spencer
i think that would be excellent

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7 months ago
Alison McMinn
Using accounting software will be a vast improvement for IRD and many GST registered businesses. However there are a lot of older folk who run a o"one-man" operation who do not use accounting software, and who might struggle if they had to change from manual accounting and paper returns. Therefore these changes should not be compulsory for those below a certain threshold.

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7 months ago
Lizzy
As a self employed contractor I file my gst return bimonthly. I do not own any accounting software. I would therefore not want to file direct through accounting software.

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7 months ago
Susan Young
I use a computer ptrgramme designed by a friend which is very user freindly and directly apllied for my circumstances. I wo7ld be very unhappy to have use one of the cumbersome one-size-fits-all progrmammes. So, yes , link it but onoy if it is a choice to do so and not compulsory.

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7 months ago
Peter
Hi we run a medium sized farm and use Xero accounting software. If when I finalise my GST return in Xero it went straight to the ird this would be excellent and save time and potential mistakes.

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7 months ago
Mike Ter Veer
I administer a small company that owns a rental property. The accounts are very simple with no payroll etc. I do the books in Excel and have put together a spreadsheet for the purpose with tables for accounts, ledgers, in/out cash, profit & loss and balance sheet. It also has tables for expense claims and GST and there are numerous cross checks built in to track down data entry errors. It is perhaps a bit laborious but it works for me and doing it all myself gives me a good understanding of the business cash flows and taxation. I produce printouts each year for our accountant who transfers the data to his system. He has occasionally made alterations where, for example, I was not fully across the latest changes to asset depreciation, but other than that there has never been an error. I have no need for accounting software and cannot justify the expense (presumably it would require annual subscription to keep up-to-date) nor the time involved in learning a new program. The investment has frankly been very marginal in recent years and this change would probably be the tipping point that would persuade us to liquidate the asset and wind up the company. The idea of linking accounting software directly to the IRD for various purposes such as GST returns would make a lot of sense for many businesses so, by all means, let the IRD provide a platform to enable this. However I would only support it on the basis that use of the new facility always remain optional. On this issue I would actually question the legality of the IRD forcing people and companies to pay for accounting software in order to fulfill their tax obligations.

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7 months ago
Mike Ter Veer
Here's an idea: With the introduction of the new system the IRD could provide all clients with free software (downloadable from IRD website) for the purpose of filing GST, PAYE etc. This could closely resemble the current on-line filing facilities but reside on clients' own computers. There would still be a password log-on after which the software would link to the IRD system in the exact same manner as is proposed for accounting software packages. This would make the new system cost free and painless for clients who do not currently have accounting software and cannot justify it in their business model. Obviously there would need to a reasonable transition period before the existing on-line filing was discontinued. Such a system could actually be quite an improvement over existing on-line filing. It would speed up the process for people who only have dial-up access and save data usage for those on wireless broadband. From the IRD's point of view all clients would be filing via the one platform. Everyone wins.

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7 months ago
Dennis Thomas
I think the concept is good, provided it's not compulsary

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7 months ago
debbi lyons
No I do not support submitting my GST return using accounting software. I am happy with the current system as a one person business I don't need accounting software.

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7 months ago
Mary Caughley
As the administrator of two small business I am concerned at the cost of software involved with the proposal for software to directly feed information to IRD. Currently I have no problem using economical software to process my gst returns, it is no hardship for me to file online and I have enough checks and balances to avoid errors. I do not use Cloud Software and have no desire or need to do so. I would be concerned if very small businesses like ours were forced to upgrade to specific software to meet the proposed requirements. I have no problem with the other two proposed changes.

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7 months ago
Malcolm
Depends on size of business. For us no, the Excel spreadsheet works.

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7 months ago
Rosemary Laing
No, i do not support using accounting software to interact directly with IRD, unless there are exceptions for small sole traders like myself, who do not use accounting software. We simply track the movement of money into & out of our business using a spreadsheet that is kept accurate & up to date manually.

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7 months ago
Scott
Not unless if it is economical to do it for small businesses. Using accounting software is a good thing, but they are costly to Small businesses and bit technical for some people as well. IRD should design good good ways or software for universal filing rather than asking tax payers to each buy software themselves.

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7 months ago
Lloyd Gallagher
The issue becomes discriminatory when people with Dyslexia are filing by electronic means. Double checking figures removes increased issues with mistake for these people and forcing an accounting filing process only means the likely hood of mistake increases. Further, it places a burden on small business owners with these issues to not run a business or pay firms to check and recheck everything. Most seem to resolve the issue using the current paper printout as it allows a recheck to make sure no data entry issues have occurred. Forcing this is, in my opinion, a breach of civil liberty and it should remain optional.

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7 months ago
Yve
The option to link GST submissions directly to IRD from accountancy software programmes such as Xero would be great for me - a self-employed small business owner. It should be something you can either choose to opt into or not though.

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7 months ago
Bobsbit
It should be an OPTION. I do not use, or want to use, payroll software or any accounting package. It would add too much cost to compliance to do so and I am not interested in this.

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7 months ago
K Clarke
I would definitely appreciate integration with accounting software, to avoid double handling, and streamline processes.

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7 months ago
David Epplett
The GST system is fine now, don't bother changing what's not broken. We do it on line and find it to be great the way it is.

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7 months ago
Vlastimil Mrazek
I would not like to see a compulsory accounting software. We have only a small business and I use mu good old MYOB. I am happy with the way things work now. Imposing a new software would be unnecessary burden. If implemented, it should be only on voluntary basis.

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7 months ago
Simon Telfer
The ability to file GST Returns straight from Xero would be fantastic.

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7 months ago
Ken Maclaren
Sounds a good idea to me.

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7 months ago
Julie
I'm reading everyone's feedback. Am I the only one that assumes with this system in place, every time you enter an invoice to your accounting package, it will automatically feed the GST info to IRD? Seems like everyone is assuming you will click a button once very two months to send the information across. Can someone help me out with this? Am I getting it wrong?

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7 months ago
Administrator
It is proposed that information will not automatically flow from the accounting software to Inland Revenue systems, but that submitting GST information from accounting software involves a deliberate step requiring the person operating the accounting software to click a “submit GST information to IR now” step. This will ensure they have the chance to check the information is true and correct before it is submitted to Inland Revenue. At this point Government is not suggesting any changes to the GST information required through a GST return.

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7 months ago
Nicolas Herren
Being a very small business, my accounts can be done just by using a spreadsheet. To have the option to integrate any software might be welcome by many businesses, but should certainly not be mandatory, as this would add to my cost to have to purchase such a software. Also just think about the time (and hence money) I would need to spend just to learn that software. So good idea, but should be optional

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7 months ago
Peter Lane
I support linking of software packages to IRD in Principal (both PAYE and GST); however would like to see some form of independent QA applied to the production of the relevant software, especially around verification that the relevant calculations made by the software are correct.

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7 months ago
Dave Sewell
I think it is long overdue to have approved accounting systems dove tail directly to the IRD to save time in data entry. For businesses (like mine) that have relatively small numbers of invoices each month it makes sense to reconcile the GST Report (I use Xero) and then have the option to Save + Publish (publish being the option to automatically send it to the IRD) in a couple of clicks, that way there is never a chance that the IRD bit is forgotten about.

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7 months ago
John Cretney
As Treasurer for a small charitable organisation with a small financial budget and few transactions annually - and with well established computerised and audited systems for our accounts, do not support having to go the unnecessary expense and learning of an accounting package. My current systems allow GST returns to be done quickly and accurately

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7 months ago
Ang
Like most people who have commented, I, too, run a small business (just me) that has a relatively simple structure, but I really like the idea of being able to load my GST return direct from my accounting software to the IRD. It would seem to me to cut down double handling and reduce manual entry mistakes, so I would be keen to use this. I use Xero (and used to use Banklink), and I notice many people have expressed concerns about both the cost and the time needed to learn the software - I think people might be surprised if they look into it actually how easy it is to run, relatively cheap (for the simplest package which I use), and how little time you need to spend learning how to use it. It might depend on the complexity of your business perhaps, but I found it really straightforward and I have no accounting abilities and still find it makes sense. I think it would be a good option for people who have existing accounting software, but perhaps shouldn't mandatory.

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7 months ago
Small business owner
We only have a small business and do not use accounting software. The current system works fine for us.

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7 months ago
David Watton
I have used an online system since I commenced business and the gst has been in most parts correct. I would be fully in favour of linking my system as it would save time and effort each and every time the return needs completing and our accountant can audit each year to ensure the amount paid is accurate and any adjustments made.

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7 months ago
David Watton
I have used an online system since I commenced business and the gst has been in most parts correct. I would be fully in favour of linking my system as it would save time and effort each and every time the return needs completing and our accountant can audit each year to ensure the amount paid is accurate and any adjustments made.

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7 months ago
sally
I too, am a small business, and cannot afford the added overheads of compulsory accounting software. I find the current DIY GST online great - simple to use and speedy.

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7 months ago
Jean G
We are just a small business. We use Xero software and find it brilliant. After 5 years I have got things pretty much down pat and it only takes me about 40mins to save the draft return, check all entries, then finalise, file and set up our GST payment up with the bank. I wouldn't have a problem linking the XERO return to IRD however to be honest, saving 5minutes wouldn't really matter!

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7 months ago
David Allis
This would simplify things - but ONLY if one login account on the IRD site can be used for multiple GST returns. Currently this is only available for registered tax professionals - but it SHOULD be available for business owners also. I file 5-10 GST returns each period. Unless I can log into all of these with one login, it is much easier for me to file paper returns

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7 months ago
Brian McIntosh
Linking to accounting systems is fine for those wishing to do so but it should be optional as those of us with small businesses may not wish to invest in new software.

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7 months ago
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