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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

Paul G
David, accounting software 'files' the GST when you instruct it to file. The software may even remind you that you have unreconciled items when you go to file it. I think the suggestion is that when you select "File this GST period'. that you also have the option of 'submit this directly to IRD' rather than go to the IRD website and manually input all the figures that your system has generated. If you don't file within you accounting system, it will never file at the IRD.

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  • agree1
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7 months ago
Brian Flowers
I run a bank package supplied by my accountant but I also keep a spreadsheet where I record all my receipts. In theory the two should reconcile but they never do. There's always entries on the bank software that I've missed and I need to add to the spreadsheet or journals I need to make on the bank software. I’m also a software developer so I should be agreeing with the automation, but from my experience I’m afraid I don’t want to see it automated.

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8 months ago
shelley
Don't change monthly online manual PAYE schedules. I do not run a payroll software. Also don't change bi-monthly online manual GST schedules.

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8 months ago
KIRIL KIRILOV
All is good. Do not change anything !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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8 months ago
Scott Ramsay
Anybody running a business should be keeping their books up to date and using software to suit their business. Why not link GST directly from your accounts software to IRD to speed up payments and refunds whilst cutting out another process? Seems logicial to talk to Xero and MYOB and get something happening.

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8 months ago
Nadine Banfield
This is fine but should only be a voluntary requirement.

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8 months ago
Mawera Karetai
I have asked to be a guinea pig in the trial to submit our GST through Xero. I am looking forward to being able to do it. I think the GST threshold needs to be raised to around $150k. GST is making our lives so difficult and affecting our profitability. Our charge for our products can not really change. GST takes the cream off the top of our business, leaving us with bugger all to survive off.

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8 months ago
John Tait
I have no problems with it being an option for software packages to electronically file a GST return. However speaking personally as a self employed contractor it wouldn't really save me time even if I had such software. The hard part is not the filing - it is the reconciliation and checking that the information I am about to file is correct. And it definitely shouldn't be mandatory to use such a package.

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8 months ago
Jacqui Phillips
We use an online accounting system , it would certainly make life easier if we could send the info direct from the accounting system rather than having to enter it all again in the IRD site. For those who don't use an accounting package the option should of course still be there to make manual entry.

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8 months ago
PW PATSTON
Yesterday opted in to pay GST to IRD via Xero. Funnily enough it was only weeks ago that I was saying to a colleague of mine that I was sure this option would and should become available within a year. It's wonderful when prophecies come true so speedily! Electronic B2G (business-to-government) transactions are an absolute no-brainer. I can't see any reasons why not nor added expense in doing so. Moreover it will increase speed and accuracy in transferring data. I would suggest extending this efficiency so that GST can also be paid/received at time of transaction via credit/debit card.

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8 months ago
Graeme Steed
I have seen this coming with the big push to get people filing electronically. It doesn't make things simpler. It just means IRD will be paid earlier and be able to access our bank accounts (eventually)automatically. I don't think this is good for the survival of small businesses.

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8 months ago
Simon
I would welcome the ability to have my accounting software send information directly to IR, with suitable controls. This would reduce my effort. I am only a one-man band, but anything which reduces effort and cuts down chance of error would be good. Support others comments that this should only be optional, but not those that say 'make no changes' - dont hold back those who are willing and able to improve their efficiency

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8 months ago
Marlene
If you are going to do this from an accounting package, I think there should be a cut-off point of either staff numbers or a dollar value, below which it is not compulsory to have such software. There are many small businesses in NZ and some are just sole traders who don't have the need for software and only use spreadsheets. As with other comments made, for everyone to have compulsory software would pose an unfair and unreasonable cost on the small business. Also, many businesses only get their income paid to them once a month - on the 20th, if their debtors pay on time, and making them pay each time they paid their staff may put an unfair strain on cash-flow. I'd like to see a justification that shows this would be more efficient or effective for both IRD AND the business. For some businesses, knowing you have to have a certain amount of cashflow available at a certain time of the month gives more certainty. If they are working on an overdraft, it would also save on interest charges for the business to only pay at the end of the month after 20th payments have been received.

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8 months ago
Grant Johnson
At Rocketspark we use Xero for both our NZ and UK companies. In the UK its great that we can file our VAT return straight to the tax office straight from Xero. Its convenient which saves time = cost. Would be great to be able to do this for GST returns in NZ plus other regular returns to IRD.

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8 months ago
Eric Hewson
I very much support the concept of paying as you go for PAYE and GST. With 8 staff and an annual turn over close to 2m having to constantly make provision for those lump sum payments is scary. If we paid automatically on an ongoing basis it would make life simpler for us.

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8 months ago
Lynda
As a small business owner, we use QuickBooks accounting package, it works very well. It takes me approximately 15-20 minutes to run the GST reports then file my return online. We dont need or want the added expense of another accounting package just to file GST every two months.

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8 months ago
Paul G
Hi Lynda, I would suggest that if the IRD allowed business to do this, then all the major accounting (and most minor) systems would bring this out as an upgrade, it is available in many other countries as an included service.

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7 months ago
diana
Our business doesn't use payroll software or accounting software that could interact online with the IRD, the extra cost would be having to invest in software that could and also that software being dictated not by what suits our business but those that the IRD has a relationship with based on its requirements not that of my business. Happy to hear that the Govt thinks it shouldn't be fully automatic but that we have the right (as we should) to determine what goes the IRD. That is concerning as it seems to imply that there was something else on the table which was both intrusive and a removal of autonomy over information belong to a business.

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8 months ago
peter Warwick
IRD should always be looking at options to file as much as possible by way of electronic systems but it should NEVER EVER be compulsory

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8 months ago
Gwen
Allow diversity. For some this would be cost effective. For us as a small to medium business it would increase my time I would have to spend sorting out bimonthly filing, this is due to the fact that I use accounting software XERO but check through the transactions and on average would have to alter 2 to be correct each time. If the information went to IRD automatically this would undoubtedly mean I would have to phone IRD and wait for an average of 7minute(s like the last 6 times) then to have to explain the situation, check the correction ect, when it would take me less than 5 minutes you are multiplying the time I have to spend by at least 4 times. Then take into consideration the fact that I have to do this for 4 businesses.... Allow people to chose what suits them, I'm all for adding this as an option, but highly against making it compulsory.

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8 months ago
Paul G
I think you misunderstand what is being offered. The user will still have to still have to finalise and approve the GST return in their system before choosing to automatically submit it to the IRD. They just won't have to go the IRD website and manually enter the data into another IRD system. We aren't voting for/against accounting systems automatically filing their own GST returns.

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7 months ago
Julie Thorpe
This is completely impractical. There is always a reconciliation process to completing GST resturns, particularly where there is a hard cut off in the accounting software for month end reporting. This means that not all the purchase invoices for the month will be on the accounting system, and some software packages, such as MYOB Accountright dont allow you to enter a previous period date when entering data after a hard close,. Thus means that the purchase invoice dates on the accounting system may not allow them to be picked up correctly for the GST return if it is automatically generated. One of our companies uses head office software, which is not set up for NZ GST reporting. Allowing small businesses an option to file from their accounting package is fine, but it should NOT be compulsory....

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8 months ago
Rose
I file electronically and have my own system that checks my figures. I have never had an error. As long as it does not become compolsory to purchase expensive accouting software that is not needed for a simple business, fine.

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8 months ago
adip
yes, I support to link Accounting software with IRD direct.

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8 months ago
Leon Chapman Limited
NO - as in my experience the books are not correctly kept and need to be checked by a professional. This concept would lead to more work and costs

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8 months ago
Ian McKee
Assumes that a small business uses accounting software. We don't and wouldn't want to.

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8 months ago
Walter Walraven
I am perfectly happy using the current system on the IRD website. I do not wish to move to an accounting software package. I would be opposed as are others to having to purchase accounting software or online accounting packages.

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8 months ago
Bev Gibson
I am a small consultancy business and have just got use to the system we are using now so I am happy with the status quo.

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8 months ago
Chris Peace
1. Reduce a bit. Perhaps $5 per month. 2. No comment

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8 months ago
Peter R
No. The accounting programme I use for our organisations accounts easily produces the information I need to lodge our GST return in the My IR website. The return is already set up for me in My IR and all I have to do is go in and load the information from my printouts into the return and send it. Very quick and very easy.

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8 months ago
Brad Fretwell
ok so the system you have works for you why wouldn't you want it to have an option to file it anyway?

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8 months ago
Paul G
" The accounting programme I use for our organisations accounts easily produces the information I need to lodge our GST return in the My IR website. But instead of having to go and manually input numbers I just push a button and it automatically files with the IRD while loading a payment from our bank account, ready for approval. Very quicker and very easier!" <what I would like to see>

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7 months ago
Ivan
Re GST, I find the current method simple and suspect that trying to link up accounting software to IRD will be costly for charity such as ours. Re PAYE, I manage this outside the accounting software as we only have two employees and this is easily managed in a spreadsheet, from which I provide EMS information and make payments against. So I do see a need for being able to maintaining simple ways of paying GST and PAYE through myIR. Having said this, I can see why direct linkage re PAYE and GST makes sense for larger commercial organisations and IRD. Perhaps there is a $ threshold needed and/or a carve out for organisations registered under the Charities Act.

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8 months ago
Matthew
I only have 1 employee and am happy to do the pay myself and it only takes 10 minutes/month online with IRD. I wouldn't want to have to research, purchase, install, update and learn any type of payroll or accounting software. If anything, doing PAYE 6 monthly for small business would be better than monthly.

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8 months ago
Alex McGrath
Would save time so all for it.

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8 months ago
Jane Hindle
Yes, if organisations are using accounting and payroll software, it makes sense to integrate it. We have Xero and use Smart payroll so the PAYE is done by them but GST has to be manually entered. Could the IRD please also share data with Statistics New Zealand. Their quarterly employment surveys are a complete waste of our time given the government already has this information through the PAYE system.

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8 months ago
Maree
Good thinking about the Statistics :-)

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8 months ago
Paul G
"Could the IRD please also share data with Statistics New Zealand. Their quarterly employment surveys are a complete waste of our time given the government already has this information through the PAYE system." THIS!! +1 Nothing like having the get out a pen and manually copy screeds of information from your accounting system to make you feel like maybe we aren't as progressive as we think we are!

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7 months ago
Hamish
This will actually potentially increase compliance costs for small businesses who do not currently have systems to link directly to IRD. This should be voluntary

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8 months ago
Tessa Curach
We are a small business also. I use MYOB but the version I use doesn't have payroll. It doesn't take me long to file GST using MYOB and PAYE using the online system, once a month. I am happy with the way things are now. I agree it should only be an optional thing to automatically go through to IRD from software.

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8 months ago
Brad Fretwell
Completely agree this is a fantastic idea and should of been done along time ago

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8 months ago
sandra
I would not be happy if the accounting software was directly linked- small adjustments have to be made, etc- I rely on our accountant and my own checks and not "blindly" an accounting software. Definitively a "no" from us - not good for small businesses!

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  • agree7
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8 months ago
Paul G
I think you misunderstand what is being offered. The user will still have to still have to finalise and approve the GST return in their system before choosing to automatically submit it to the IRD. They just won't have to go the IRD website and manually enter the data into another IRD system. And you accountant can still check easily before filing. We aren't voting for/against accounting systems automatically filing their own GST returns.

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7 months ago
Jenette K
No Definitely don't want to link my computer to Inland Revenue!

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8 months ago
Daimen Jones
Come on guys if you think filling out a maximum of 11 boxes on a piece of paper or electronically online is going increase the tax take on my new found efficiency gain, I think you are probably a little misguided if that is the intent. I can not see any real gain at all. The simplicity from my point of view when doing GST is to have 3-5 codes: expense, income, personal, and capital. Now that would seriously make GST more efficient. The making payment and filing part does not even make up 1% of the effort of collecting the GST on behalf of IRD. Perhaps you could review the 99% part of GST collection, that would be helpful, in fact by this stage of my input I would have submitted and paid my GST electronically so again it seems incredibly pointless to link to the multitude of packages and systems out there....... unless IRD have other considerations down the line????? Also consider the forgotten battlers that are out there that struggle daily with the lack of consistent internet connections. There is a huge amount of stress, frustration and time wasted when you are forced to use a system that is not suitable for limited internet access.

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8 months ago
Jewel
No, I don't think it should be linked.

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  • agree7
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8 months ago
David Barker
We need to consider how GST data is interfaced between business and IRD in other countries, especially Australia, not least because we can learn from their experience but also because the global accounting software providers like Reckon tend to produce poor local market solutions when we do not "fit" with the general requirements for their product. e.g. Reckon still make us use Australian format bank code formats.

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8 months ago
Julie
I agree with all the little businesses out there. My "big brother" moment jumped out LOUD and Clear..........next will be automatic deductions from our bank accounts to pay as you go...literally. Cash flow is a huge issue for small businesses, and whilst some of us squirrel away the amount be paid on due date, it also gives us leverage to have it sitting there for those "just in case" moments that crop up. It takes me next to no time to IRfile returns, and happy to have the status quo remain. Acountants.......where are your comments? If this is a compulsory compliance, surely you will be out of work? And IRD....how many extra staff will you have to employ to manage this system? All the redundant accountants? This should definitely be NON compulsory.

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8 months ago
Steve Porter
I can't see there being any significant time savings with what is proposed. GST, in particular, requires reconciliation work to be performed before the Return is submitted and this will not change. The only time saving that I can see is the time involved in typing the figure into the online return which only takes minutes.

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  • agree7
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8 months ago
Simon H
Personally, I don't see a need to make compulsory changes to the filing process itself. For a small business such as mine, the combination of my accounting software (MYOB) and the online process through myIR allows for a simple and relatively hassle-free method. Unless there were benefits to small business I see no point in changes.

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  • agree7
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8 months ago
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