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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

Talia Clark
I would only support this is it were optional and not compulsory. Personally I wouldn't use it.

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7 months ago
Michael Leslie Edwards
Compulsory electronic filing is frault with problems one being all the hacking occurring online at the moment. ... Doing it by form filling prevents hackers getting my information. No matter what people say the Internet is NOT SECURE, the government systems in various countries have been hacked including the military systems, so how can the inland revenue be trusted

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7 months ago
Raymond Smith
Yes a good idea but for small businesses like ours it is done on a simple spreadsheet. Therefore I suggest there can be an option to submit directly from suitable software or continue as is. Thank you Ray

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7 months ago
Paddy Hughes
I do not think it should be compulsory because as a small business owner with few streams of income I have no need of an accounting software programme

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7 months ago
Ian Howarth
Definitely.

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7 months ago
ion
Definitely not, the accountants charge much more

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7 months ago
Nicola Chisholm
Yes, you should definitely be able to file GST returns straight from the accounting software e.g. Xero, to the IRD. Having to re-enter the information is onerous and leaves room for error.

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7 months ago
Gerard
This isn't a huge deal for me either way, but if it can be automated into my accounting software (xero) it's just one less thing to have to remember. Seems sensible.

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7 months ago
Steve Lowery
Yes Yes Yes

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7 months ago
Al Hanline
I feel it should be voluntary as not all small businesses operate on accounting software, also for rural users where internet is unreliable, it would be an additional burden/frustration

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7 months ago
Dmitry
IRD should design an API for open integration with accounting software, as well as its own VERY BASIC web-software (IRD has some already). If open API is introduced, business owners are free to chose any accounting software, design their own software or use basic web-services.

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7 months ago
Dee Attwood
Of course i supporrt this idea. We lived in Australia for 8 years, i worked in an accounting firm, we lodged all of our GST and PAYG forms online through a portal. This was mu7ch better system as we have here yes, but this is one sided information. We were not informed well when we purchased Xero for our NZ based business, that GST forms cant be submitted through this software but you need to create an online account with IRD to complete this, making it a 2 set process each 2 month period. Getting the figures and entering them into the portal here for NZ. We would love to see Xero allow us to submit these GST forms directly to the IRD, but also for the IRD to keep up to date on a weekly basis of regular payments received or refunds given, as we find we cant get an accurate account balance unless of course you wait on hold for 1 hour . We regularly ask for updated statements from them as only sent once a month. A month is along time if your account is in negative by mistake.

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7 months ago
mai
I prefer leaving PAYE and GST processes as they are. It is good to give businesses options to embrace electronic filing and processes but it is not always necessary

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7 months ago
Kathy
I am a tiny business with one part time employee. I do not want to invest in accounting software. It is not something I need or want to spend the money on. It has to be something that is optional for small businesses.

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7 months ago
Petra Oldfield
In principle I do not disagree with the proposals, however as a sole trader the expense of having to acquire accounting software or to use a software package when a simple spreadsheet with macro's does the work for me. It takes me precisely 10 minutes to lodge my GST (the length of time it takes me to enter the relevant numbers in the online form).

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7 months ago
John Morrison
I certainly support submission of the PAYE and GST returns directly from the accounting software.

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7 months ago
Jann
We are a small business and we use an accounting software that is free. Being small, we like to save whatever we can. If a compulsory software is introduced that means we have to pay for subscription. I do find some of the local accounting software expensive. I think the current system is already quite easy, there is no need for further enhancement. What I can suggest is for those who submitted their GST forms wrongly, they should attend training to get it right.

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7 months ago
Henry Penny
I think electronic submission from accounting software should be available, but not mandatory. I also think that bank statements should be sufficient evidence of a deductible expenditure. E.g. paying a power bill. The idea that a paper receipt or invoice is required as evidence is out dated. An invoice could easily be forged, but falsifying bank records is practically impossible.

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7 months ago
Genealogy Guru
I think it's a great idea, but should be voluntary, so those without accounting software don't have to sign up. As I have the software it would be much easier to be able to file directly through there. Although, they would need to allow for a small margin of error of things that don't get picked up correctly until end of year accounts are due.

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7 months ago
Sarah Maclean
I support integrating GST payments into my accounting software - as used to be the case. It's much easier for me to do it with a few clicks rather than extracting the info and doing a separate process to file my GST. And I'm less likely to make errors if the process is integrated with the other things I do on the software. I'm a small business owner and keen to reduce the time (and therefore cost) of compliance.

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7 months ago
jodi
I think it would be great if my integrated accounting software package could submit GST information directly! it would save time!

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7 months ago
Robbie Watt
I totally agree that accounting systems and IRD should be linked for GST and as many other items as possible. The more value you can extract from the accounting software the better, it also means less time filling in forms with information that should automatically transpose. If you have nothing to hide then greater integration is a benefit to everyone.

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7 months ago
MarkW
Electronic returns from 3rd party software is good in theory. The problem comes when B2B systems fail. Who is liable if a gateway goes down? Suddenly there is a mad scramble to go back to the old systems and no one is trained on that any longer. Also, there are hundreds of accounting systems out there many of which are international. Many will not be bothered to create a special B2B only for NZ. If this is made mandatory, it will be a huge unnecessary burden on small businesses.

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7 months ago
Wendy Gallaher
While I can see that utilising accounting software to send in one's gst return could be very advantageous to many small businesses (because it potentially could if using a well designed system it would save time), my concern is that it should be an "option" only and NOT mandatory. I currently have a small business and keep all my records on a spreadsheet, and I take the totals from that and do my gst online and it only takes me 5 minutes each month. If I was forced to purchase new software to submit my return this would mean the initial cost of the software, and/or any monthly ongoing costs, not to mention the initial investment of time changing over systems and training on a new system. For me personally this would be a total step backward if the aim is to make life simpler, as for me the current system works perfectly. So make it a win/win - if the majority see it as a step in the right direction of simplifying tax compliance then make the option of submitting via an accounts system available, but not compulsory. That way it will keep everyone happy, as surely the idea is not to make it easier for some, and worse for others, but to make significant steps forward in easing tax compliance overall.

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7 months ago
Dot
Hi - this won't work for us as we run our gst out of a paper copy system. We have no requirement to invest into an electronic system due to the low volume of transaction items. I hope there is an option for us without having to purchase an accounting system... thanks, Dot

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7 months ago
Maggie Broome
I have a very small business but do use an accountant for my yearly financials and they provide accounting software that has a link to my business bank account. I can run a GST report really easily from the web based system so I find it crazy that I then have to go to myIR and re-enter all the information. So for me it would make sense that this is linked and I could file the report directly from there, as long as there is opportunity to check it/save it along the way. This wouldn't change my compliance, but it would save me time. I agree that it should be an option, not compulsory.

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7 months ago
emily cooke
We are self employed and use xero. Its so easy and I have thought in the past why do I have to re-type the information into the IRD website? How simple it would be if you could then click a button and it would transfer the data, as yes the possibility is always there for you to forget to load on IRD website later. IRD gst website is nice and easy to use though, and yes I like the email reminder. So maybe make it a function, but not compulsory. We started to file online because we were told it was going to become compulsory anyway, but it did used to annoy me that we had to file by midnight on due date, but someone who posts can send it 'late', as long as it was posted on the date. Someone else commented that a similar email reminder for PAYE would be great. I agree, although I only had to do PAYE for a couple of months, it was hideous, got it wrong and said i'd never employee anyone again! GST instructions and forms seemed to flow better for the novice

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7 months ago
Emma Donadieu
I use Xero for my small business and would love to be able to submit my GST report directly to the IRD from Xero. Nevertheless, this should work alongside other methods of submission i.e. online / paper and it shouldn't be a requirement for businesses to use accounting software. Accounting software such as Xero is not suitable for all businesses.

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7 months ago
Falita Tanu
These are all good ideas for companies who have accounting systems, there are alot of one person companies that can't afford the compliance costs so I agree with the option by one of the previous comments for ird to allow for a low threshold option for these smaller companies to submit their returns as per usual rather than have to change to suit these new policies.

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7 months ago
N Williams
We do not have a payroll package as only one person is employed so a wage book is used, and being a small business do not want to end up having buy a payroll package for One employee, I am happy with submitting employer schedules. I also do books for another and run a cash book due to it being a small trust so having to set up another accounting package is not viable. I think we should have the choice to do either and would hope IRD take this in to account so we have that option.

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7 months ago
Noel Munford
I'm a small business and prefer doing things that don't involve financial administration. My accountant has me use MYOB Banklink software. It is brilliant and saves me both time and money. Doing GST with it is a breeze. At the end of the process I have to print out the report and then go online to IRD and enter in the produced figures into your system. Every time I get the same calculated amount and every time I wonder why the info generated by my software can't be automatically linked to you. Even give me an option to set up payments to pay the GST on a set day. It's then up to me to make sure the funds are available at that time. I really enjoy the speed of each of theses three processes but surely it's possible to join calculation, submission and payment instructions all together

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7 months ago
Financial Adviser
It seems logical on the surface to integrate the systems such as Xero & MYOB. But I find manually lodging it in IRSERVICES very easy and straightforward so not fussed. The comments on "adjustments" &"checks" before manually lodging are very relevant so I would stick to the current system as it works well.

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7 months ago
Tracy Ebbetts
Totally agree with this. It has been successfully implemented in other countries and saves time which saves money. It also improves accuracy as there is less manual copying and input.

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7 months ago
Jocelyn Chignell-Stapleton
It would be incredibly beneficial to be able to file Tax returns directly from accounting software, as we're currently having to copy and paste everything which just seems vastly inefficient.

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7 months ago
Russell Hatcher
We use Xero and the future of Xero is that we will do all our banking and hopefully our GST Returns etc from within Xero. We welcome these ideas as it will save us costs and time. Having to do our GST Returns online with IRD is just duplication of data input and therefore additional time and money.

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7 months ago
Brett Mochan
I strongly disagree that the I R D systems should be integrated with business software for the purposes of filing Gst and PAYE Returns. The large majority of business owners in NZ are small to medium size businesses that operate a multitude of accounting software systems all of which purport to be simple to operate and give reliable results. My experience is most small to medium size business operators do not invest sufficient time and effort to insure full competency with their software systems resulting in mistakes being made that cannot be corrected by them owing to their very limited understanding of how the program works. Their understanding of general accounting concepts and principles is likewise generally limited so they are not positioned to actually assess whether the information provided by their accounting software reports is correct. Consider also the large majority of accounting software packages allow mistakes to be corrected in prior accounting periods , months or even years and if not carefully controlled and monitored these adjustments will not be captured in later Gst periods. Let alone transactions simply being posted to the wrong GST period due to incorrect dates being used ! Transactions being deleted is also a common feature of the majority of accounting software packages and if actioned after Gst Returns have been filed we are once again faced with a reconciliation nightmare at the end of the year if these instances are not closely monitored and recorded - all of which the suppliers of the software will assure prospective purchasers / users that same recording is made unnecessary through the successful use of their product(s). The point being made is with the opportunity of widespread errors being made and Gst Returns being "automatically" filed without the necessary "proof" reconciliations being undertaken there is substantial risk erroneous detail will be advised to the I R D. This will entail a great deal more time to correct the most recent example being NOVOPAY whereby the M O E had to ( and is still ) employing a whole new workforce to deal with the errors that were made by that program even with the very best endeavours of some of their most skilled operators. Admittedly an extreme example ! With more time I would like to make further comments but as usual time does not permit.....Thank you for the opportunity of making the above comments good luck with the changes you are trying to make. Regards Brett Mochan

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7 months ago
Trevor Baker
"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." I believe that this proposal would increase my compliance costs and be a significant inconvenience if implemented. My existing freeware accounting package will need to be replaced. Existing data would need to be migrated to the new system. The system would need to be acceptance tested. I would quantify the cost at >$5,000. It is affordable for me now. It would have been a barrier to entry when I was first starting up in business 6 years ago (and adopted the freeware accounting package). The information required to complete the online form is available from a standard out the box report provided by my accounting package. Manually transcribing this information has not presented me any difficulty in the past. I would not value this step being automated. When I ask myself 'why does the IRD not provide the capability and those who wish to use it do so?', I imagine that the appeal of this proposal to the IRD is that it will ensure that all tax payers maintain a double entry accounting system. If so, I can understand the desire to improve the quality of returns.

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7 months ago
Stephen Brooker
Im all for a more digital world. When I was in south korea many years ago I recognised the potential a non capitalist communication infrastructure provided. I travel around the country lots for my business. I generally have to allow a couple of hours to complete a gst return online...our internet is 20 years away from being efficient sadly. Once I had to drive over 150km in search of a telecom wifi hotspot that I could actually connect to and was fast enough to load a page before failing. Im for integration...so we only have to be frustrated by one website to accomplish things.

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7 months ago
Helen Ann Cameron
The principal sounds good. We use Banklink, through our accountant, which I initially was not confident in using. For the past three returns, I have done so electronically. No worries now of not filing the return late, as it's instant. A much safer option what with our sad snail mail now-a-days.

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7 months ago
Nicholas Lee
Establish standards, but don't require people to upgrade or change software in order to something critical. For example develop some sort of electronic file format - like mt9 for bank direct credits - allow people to email, http/POST with return receipts.

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7 months ago
Monique
As a small seasonal business the current electronic method of filing GST is sufficient and preferred for us. We do not operate with an accounting software system, so the amendments should continue to allow for the current method of filing as well.

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7 months ago
Max Thomson
I support linkage of accounting systems to IRD as long as small businesses are not required to buy accounting software to comply. My small business uses bank account internet facilities along with spreadsheets to do GST returns as we don't have that many transactions.

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7 months ago
Antje
As I already use an accounting software for my small business, it would reduce my workload by about 10 to 15 minutes per return. Now I produce the report from the system, then have to enter the data into IRD's online services. The current system is fine, but it would be a little easier to be able to use the form my software already provides. It might increase cost of the software (which is compliance cost too) though if it was to include that feature. I think this should be a voluntary option, at least for a substantial transition period, and I favour the idea that for small and medium sized companies IRD offer an online accounting package for free or at very low cost.

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7 months ago
Dolf van Asbeck
As a very small business I have no desire to invest in accounting software. It is an option that can be left open for those who want to.

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7 months ago
Linsey-Ann Taylor
I think that it should be flexible. If some companies have software that would allow them to integrate their information for GST, then that would certainly make it easier. However I do not believe that it should be compulsory and for those that want to, the option to enter it separately into the IRD system should still apply. I agree with the comments that many small businesses may not have accounting software packages that could integrate the information and they should not have to incur a cost to obtain a software. And for small business, re-entering the information into the IRD system is not that onerous.

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7 months ago
Graham Sharp
I would like the option to export a GST Return directly from my accounting software, it will definitely save some double handling and chance of errors manually transferring figures to the IRD Online form.

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7 months ago
Michael Boissard
The proposed changes to GST and PAYE filing are very sensible and would help my farming business. I agree that refunds should go direct to bank accounts.

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7 months ago
Lisa Forde
We file electronically & I don't think it would be much of a saving if any to allow IRD access to our accounting system

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7 months ago
Shannon Wilson
Definately think that it should be able to link electronically or be posted electronically from your computer software. We use Xero and it would be simple to when you finalise the GST that it sends and uploads the information automatically to IRD

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7 months ago
Allan
I agree with other small business owner comments that DO NOT have accounting packages. I run a small business without an accounting package and while the proposal would no doubt be acceptable to large enterprises to legislatively enforce small businesses to purchase an accounting package is simply NOT ACCEPTABLE.

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7 months ago
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