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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

Arie
I also run a small company. It toke me a long time to understand our current accounting package which does not do payroll. To invest in a new system would be cost prohibitive as these packages are very expensive and complex to understand unless you are an accountant which I am not. The current online system works well for small businesses. To force small businesses to comply would mean companies cutting overheads and result in job losses.

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7 months ago
Diana Manihera
Our business has only just made that huge step to have its first ever or upgrade into owning a new laptop and accounting software. Although we are only managing GST Returns at the moment, I am a great believer in supporting the easiest and most effective way of paying Debtors. I fully support online Bill Payments/Transfers, however, this is complicated when bank providers do not allow businesses with two or more signatories to have access to online facilities. We are currently seeking providers in the Bank sector to meet this need. I guess for our business the current payment/administrative options remains in place, using the current system.

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7 months ago
Paul Garvin
I support this proposal as it is efficient and reduces the error rate and eliminates transcription errors. However, I think that a trial period is required to iron out any bugs and anomalies. Also, have it voluntary for 2 years.

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7 months ago
Jack Yan
With our software, we’ve never found anything from mainstream vendors that suits our needs, so integration with accounting software should be an option, rather than compulsory. With a small business, it’s easier for us to file using a separate form as we do currently. One reason, and it could be a generational thing, is I prefer writing on the form, as it gives me a chance to review and make sure I’ve put the right figures into the right boxes. I recall starting the electronic filing once, and I was met with a note that should I continue, I would, from that point, have to do all returns online. That’s not an option as I’m not the only person doing them (an accountant is involved, so things need to be run past him), and I can’t trust email notifications as much as posted ones yet. I’d hate to miss filing something because of an email not arriving, and as a 200-email-per-day person, there’s the very real risk of filters removing certain emails, or simple human error.

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7 months ago
Patricia Pinfold
We do not use accounting packages which are based on excel. We use the manual forms, pay electronically for both PAYE Deductions and GST and want this to remain this way please

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7 months ago
Tony Hutchins
I am a sole trader in a small business. Quite frankly I don't think I would be smart enough to learn a new accounting system. I use excel and let my accountant do the hard stuff. (Like depreciation, business use of personal property, etc) I like the idea though. As long as I can use my own system of record keeping.

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7 months ago
Ewen McNeill
I support IRD providing the _option_ for taxpayers to submit their GST returns directly from their accounting software; for taxpayers that already use accounting software which gains this support it should result in quicker more accurate returns with less effort. I would be strongly _against_ making such "direct filing from supported accounting software" a _mandatory_ requirement as many businesses, especially smaller businesses, either use their own software -- even simple spreadsheets -- or use software that would never have such a feature. Requiring those tax payers to invest in new software, and possibly a new computer to support that new software, would be an unfair burden on small businesses. The existing means of filing GST returns (at least via the IRD website) should remain. Ewen

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7 months ago
Lenard
Sounds great, as long as it is not compulsory! As a sole trader I've got six monthly GST and no PAYE. My business is simple enough to run a (spreadsheet) cashbook and no need for a tax agent. I spent less than 3 working days a year total, doing GST returns, provisional tax and annual returns of me (and my wife's). If this became compulsory, I can only see my cost rise, not drop. How many other sole and small businesses operate like this?

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7 months ago
David16
For me any requirement to use accounting software for GST etc would be a significant extra cost. As a sole trader with a very limited number of clients, I do not use or need accounting software (~issue only a couple of dozen invoices per year). The additional cost of both software and learning to use it would be considerable and unacceptable. My wife in a relatively similar situation (but totally separate business) got talked into purchasing a well known accounting package a few years ago by her accountant. After many days of trying (including many hours sitting with her accountant trying) she never got it to work and eventually abandoned the effort. But not before costing her a considerable sum of money (software and accountants cost - despite the latter encouraging the purchase in the first place and then not themselves being able to get it working for her). And then more hours recovering the data to enter into her existing spreadsheet based 'system'.

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7 months ago
Karsten
I run a small business and use Xero (plus an accountant for ICT returns, though I do the GST returns myself). The Xero GST Return Report does 99% of the work, currently I have to then copy/paste about 5 numbers from the Xero report into the My IR online system. Having the ability to have Xero just transmit it across those values directly would be neat, but I don't think it would save me more than maybe 10 minutes (the largest part of the work is to making sure that I've entered all expenses for the return period). I don't think using an integrated process should be mandatory. If others want to keep doing their books on paper and working out the figures with a slide rule thats fine by me, though it does seem rather last century.

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7 months ago
Billy
I'm ok with the concept of electronic entry methods and this probably works fine for those medium to large sized businesses. However as a small business with a stand alone accounting package (not cloud based) I would have a problem being forced to upgrade to an accounting package that is compatible with the new requirements (for the benefit of Xero or MYOB) as this seems a bit unfair. You'll need to rethink the transition to any new system and, work on providing incentives for small business to move (subsidise new accounting packages as an example).

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7 months ago
Billy
I'm ok with the concept of electronic entry methods and this probably works fine for those medium to large sized businesses. However as a small business with a stand alone accounting package (not cloud based) I would have a problem being forced to upgrade to an accounting package that is compatible with the new requirements (for the benefit of Xero or MYOB) as this seems a bit unfair. You'll need to rethink the transition to any new system and, work on providing incentives for small business to move (subsidise new accounting packages as an example).

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7 months ago
Simon Benedict
We have several small businesses and we run simple cashbooks along with a home-made excel spreadsheet program that automatically calculates our GST and sets it just like the IRD Form (with the little boxes). We just need to copy the amounts onto the IRD Form. It costs us nothing to maintain, it's accurate (as long as we load the details accurately) & it's quick. We do not support submitting our GST returns using accounting software like MYOB, etc. We are happy with the current system and are dismayed how much 'Big Brother' is already watching over us in NZ without even further mandatory controls.

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7 months ago
Steve Edmonds
Ours is a small business with accounting software that works perfectly for our needs. I would not want to be forced into the expense of changing software and re-training just to have filing done from accounting software. Would GST registered individuals and contractors also be forced into running accounting software. I would support a means of electronic filing by file (CSV) upload.

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7 months ago
Jonathan Wood
I do not use and never intend to use any accounting software other than a free Open Office spreadsheet. Any requirement for a small business to pay for any accounting system or use anything other than a paper cashbook, or simple spreadsheet, is completely out of order and demonstrates a poor understanding of business systems at the small end of the spectrum. Both of the above mentioned systems are able to be scrutinised by IRD at any time if they feel the need arises.

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7 months ago
Max Vao
Im only a small business and I dont see a need for the type of integration of accounting systems with IRD for small businesses. Maybe necessary for the big businesses.

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6 months ago
Ron Marriott
By all means let people link from their software but make it optional. As far as we are concerned the gst online procedure works well. If it is not broke please don't fix it!

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6 months ago
PeterD
Is this really a possibility given the large number of accounting/integrated software packages currently in use by companies in NZ? I would rather see the IRD focus on integrating GST information from other government departments such as customs. e.g. If you have deferred GST status in NZ you still have to pay NZ Customs monthly and then claim the respective amount back from the IRD through your GST return. With Australian GST returns the deferred amount of GST is electronically input into your GST return, no payment is made to Australian Customs, and processed with your Australian GST return. If the IRD aren't able to talk electronically with other government departments on matters like these, it makes me highly sceptical they would be able to electronically communicate with all the various software packages in use by taxpayers in NZ.

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6 months ago
Vicki Strachan
Hi, I agree in Principle to being able to submit from my accounting software. I don't believe it should be compulsory as not all small businesses run accounting software. I would need to be ensured that the information is "pushed" from my accounting system and not "pulled" from IRD. The control should be all on the side of the business submitting the information. That being said if I could submit from my accounting system it would greatly simplify the steps I have to go through to file my returns.

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6 months ago
Cherie Byrne
The proposal that GST & PAYE returns could be done through accounting software direct to IRD: > we have a small business and would be opposed to having to purchase further accounting software specifically for that purpose. The process available currently operating through the online system with IRD works fine, especially for a small business like ours.

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6 months ago
Carla
For those already using an accounting software and if this is compatible to do GST returns straight to IRD great, however this SHOULD NOT be compulsory - buying additional software would be adding more expense that small businesses or contractors do not need.

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6 months ago
admindarn
does submitting the information also mean immediate payment of gst ? being an importer of goods can have a huge impact on your gst return bi monthly does even this out somewhat. extra compliance costs will be involved, as a small/medium sized business doing all the admin, I already have to plan my holidays around any necessary due dates, if we are talking tax gst etc, I would have to somehow employ another person train and trust them with private company information , furnish them with company bank account details etc. This would just be tying up my time even more the current system works for me as it is

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6 months ago
Mike McGrath
I am involved in processing all the required payments to IRD - PAYE, GST, FBT, RWT etc and we currently have two accounting packages- one for our day to day operations that it totally integrated (Accredo) the other is for payroll (MYOB) for 20 odd people. I love the ability to lodge the respective forms online, apart form RWT - this would be great if this could be done on line and complete the package, as it's simple and easy to follow and I believe far more efficient. PAYE return is even simpler with the ability to import the information from MYOB into MyIR which means I can process this in about 10 minutes - this includes cross checking,entering payment details in Accredo and in the bank. I think having the ability to submit directly to IRD is great but I think that businesses should still have the final say as to when this information is submitted.

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6 months ago
Jo
We are a small business using MYOB and on a two-monthly GST cycle. We file our GST returns on-line. MYOB produces the GST report and a detailed transaction report for checking, so for us, the system works well and and would take less than 10 minutes each report period. It would be one less step if MYOB could send the final/checked GST return directly to IRD, however it would be minimal benefit in compliance effort against possible disadvantage in compliance cost to upgrade/replace accounting software

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6 months ago
Mario Becroft
The *option* to file GST electronically (again, using open API's) would of course be welcome. Each business can choose to use it or stick with manual processes according to their needs.

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6 months ago
Sue Thirkettle
I am the accounts person, funder and bookkeeper for 4 small social service Not for Profit Charitable Trusts. I don't support linking software as only 1 of these groups can afford software that could do that. None of these Trusts can afford to pay more for software or other costs. I do support anything that makes the process simpler though as it is pretty labour intensive. Maybe there are tiers introduced somehow - there needs to be more support for Not-for-Profits who run on the smell of an oily rag all the time and give a tremendous amount into society

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6 months ago
Mandy Keesing
Just stepping back a bit first - we already have extended times of not being able to make contact with the IRD through the website, and we know the system is not coping too well and is virtually crashing at certain times, and these times are increasing. I now have clients who have given up electronic filing of returns due to the time and hassles involved. How is the IRD system going to cope with potentially many more electronic transactions coming its way, especially at these times (eg when PAYE or GST returns are due). How about putting the horse before the cart and then dangling the carrot, so to speak? When will the upgraded computer system be in place, debugged and working? If this process is followed, then it will save all of us extra compliance time in having to rejig our systems as well. Work on potential changes yes, but please don't rush to push things in place too early.

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6 months ago
Ali Peirson
1. I found it super easy to submit my GST via integrated accounting software and this reduced my submission time by at least half 2. The integrated trial worked well for me, no issues

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6 months ago
Joanne Burke
Submitting GST information directly from integrated accounting software will certainly increase my compliance effort and costs. As we are a family farming business, choice of accounting programs are limited in NZ and expensive. As the current system stands I can easily, correctly and for free submit GST returns without an added $1,000pa software subscription. Farming has a large turnover but very small returns. Small and medium sized businesses are the back bone of the NZ economy so please leave our options open to trade on a very tough market. This area of independent GST submission must remain please.

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6 months ago
Anne
My understanding is that it would not be compulsory but still optional to file on-line. Is this not correct? We run a small business using Xero accounting software which has definitely reduced my time spent completing compliance work. It would further reduce my workload being able to file directly from accounting software so I fully support the proposal.

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6 months ago
James Cunningham
Integration makes sense. It is the way forward! I ran a small business and would prefer the integration of all payroll aspects to be seamless. Why the need for another process? The payment of PAYE etc. should be automated, and linked to the bank account as well. The only reason why businesses may object is if they have a cashflow problem. Compliance costs should reduce since no human intervention is required. Most of the current recently release accounting software runs on Mac as it is web based. The new process will require less administration. Yip one will have to be onto it and accuracy of record keeping will be required. But this will only result in overall better administration. Go for it! The sooner the better!

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6 months ago
Jacobsen Associates
I am opposed to integrating my accounting system and that of my client with IRD. You say you are trying to reduce compliance.That is absolute nonsense. The problems which will arise trying to reconcile gst will be even more difficult if IRD try and assess the gst. With respect to paye. If employers have to pay paye to ird every time they pay their staff this will increase not decrease the compliance time. Get real.

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6 months ago
Clive Lansink
I support the integration of filing GST returns into accounting software, but only if this can be done through an open and non-proprietary protocol. Ours is a small business and we actually run our own accounting software. We don't see the need to pay for an accountant and nor do we need to pay for Xero or MYOB. But even on principle, since paying tax is a legal responsibility, it would be wrong if only certain accounting software programs were authorised to communicate directly with IRD. Otherwise I will stick with the online GST filing system as it only takes a few minutes to complete.

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5 months ago
Julie Webb
I don't believe small businesses should be forced to have their accounting system connected to IRD. We have a very small business and prefer to keep processes to a bear minimum, so we concentrate on actually earning the money. We already submit our 2 monthly GST online and I believe this is sufficient.

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5 months ago
Angus Ogilvie
No. Although this can be done it shouldn't mean it is done. Despite the boasts of all the software houses that their respective products can eliminate all the tedium of compliance, the reality is that many taxpayers do not keep these systems up to date. They often forget to include invoices or receipt money received. There needs to be a process of checking either by the taxpayer or their tax agent to ensure that the information submitted to IRD is accurate. If it is taken directly from the software I would imagine the department would struggle to apportion any blame for incorrect GST returns. The data in the software is not reliable enough. Cash payments are often not included and coding can be inaccurate.

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5 months ago
Simon Vallings
The new gst electronic filing system is already very simple. All it requires is that the totals are entered manually, only two figures if there are no adjustments. How could it be simpler? Linking to IRD with accounting software would require me to get new software which would cost money and time to implement and I am opposed to it. Any linking with accounting systems should definitely be voluntary.

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5 months ago
Leigh
It needs to be voluntary – otherwise the compliance cost for small business becomes to high. Forcing the need to purchase software that provides the integration when they may already using software or manual process that works just fine for their business or alternative they would have to then pay someone to process their information for them just so the GST and PAYE can be filed electronically.

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5 months ago
Maree Beverland
I support it, but the option of filing GST returns electronically or manually should still be present. For contractors / small business owners whose accounting is very simple, forcing them to buy software they don't need or employ a third party accountant for the sake of filing GST returns would be adding another cost for no particular benefit to the contractor / business owner.

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5 months ago
Sam Lewis-roberts
If the GST return form rules could be encapsulated into a reusable software component or API service that could be incorporated into your accounting software. Then companies would be more confident to ultimately submit directly, having been given the opportunity to test the submission against the self same rules that would be used at submission time, and address discrepancies before submission.

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5 months ago
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