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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

Brett Allan
Great idea! Will the IRD please develop the software and provide for free on their own platform with bank direct feeds. Then it would be something useful for GST, PAYE, and INC. Do not outsource this to a pile of third party software providers, and worst option is to narrowly select only a single or few options. What would happen to the Xero share price if they had exclusive filing rights for all tax types, they could charge any subscription price!

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8 months ago
Brad Fretwell
I think the IRD is asking an incorrect question... It should be : DO YOU SUPPORT BUSINESSES HAVING AN OPTION OF LINKING BUSINESS ACCOUNTING SYSTEMS TO INLAND REVENUE?

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8 months ago
Paul G
I agree with your sentiment, but I do think that is also incorrectly phrased. It sound's like the IRD would have access into your accounting system. The question should be something like: DO YOU SUPPORT BUSINESSES HAVING AN OPTION OF FILING GST, PAYE AND OTHER TAX TYPES DIRECTLY FROMTHEIR ACCOUNTING SYSTEMS, TO INLAND REVENUE? Even then, people seem to be concerned that their system will file it automatically without their input! The question is very badly phrased and immediately conjures anti "big brother" sentiment, giving the disconcerting impression that the IRD could somehow link back into your accounting system.

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7 months ago
NZ Kebabs
Definitely DO NOT introduce linking from an accounting system: it means that we will have to purchase, and get training, to use that software. We already struggle with the time and costs involved in running a small business, paying taxes and filing returns. The best approach for the small businesses would be to use AN ONLINE FREE / OPEN SOURCE service, and TO IMPROVE the current online system: so we put two numbers (when it comes to PAYE) - hours and wage per hour, while all the rest (kiwi saver, tax) should be calculated automatically from the employees tax code. Best would be if you interface the BANK system to the PAYE one: currently the PAYE is reported on a monthly schedule, while most employees are paid on weekly / fortnightly basis. It means that we need to calculate the PAYE twice: as the payment schedule and the PAYE schedule do not merge (e.g. in months that end in the middle of a week).

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8 months ago
Trish Stephens
Currently I use MYOB and it is very easy to work out GST. I do not have payroll package as our business is very small and wages erratic from month to month. Very easy to use current system. i do not support linking small businesses to IRD. Purchasing a payroll software system is not economical for our small business.

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8 months ago
Julie
When I put my feedback up here this morning, I ticked the "notify all comments posted". Since then I have not seen any in favour of this change - especially for SME's - unless I have missed one. Does everyone have the same opinion? IRD...are you taking this feedback seriously or is this something that'll just happen anyway, sans previous government referendums.

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8 months ago
Douglas
Small business will calculate GST in many different ways, more than likely in a spreadsheet. It will create more problems for the small businesses to integrate software, especially when no 3rd party is involved

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8 months ago
Lois
no I don't agree. I would personally prefer to keep doing the written gst return as I find it so much easier

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8 months ago
Steven Lust
It would be useful to have the OPTION of submitting GST returns by integrating the process in accounting software.

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8 months ago
John Currie
I do not support ANYTHING that adds to business costs. Therefore, accounting software linkage should NOT be compulsory.

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8 months ago
Helen
If you are going to do this, it must be optional. A lot of small businesses and independent contractors in NZ run their business without accounting software. To impose the cost of having to use accounting software on all organisations in NZ could pose a substantial net cost to the economy; and provide a barrier for new start-ups. Other options: Let small businesses file once a year - that'd halve my compliance costs. For me the current categories of costs required by IRD are meaningless and not how I prepare my accounts for any other purpose. Having to recode for tax/GST purposes adds compliance costs. Tax returns may be made on cash or accrual basis - that flexibility/choice should definitely be retained. As a CA I also have some concerns about the practicality of feeding the information for medium-larger businesses given the need for month/year end adjustments and adjustments to GL coding made for tax reasons.

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8 months ago
SP
My accounts are simple enough to keep track of with customised spreadsheets. I wouldn't want to see it become compulsory to use accounting software, but making it an option is a good idea.

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8 months ago
Jackie Bott
Being a graphic designer I use Mac. There are no accounting software systems that will run on a Mac (unless you spend a LOT of money and even then it has glitches) that will successfully integrate with Windows, which is the system accountants use. This proposal is flawed because non Windows based businesses would be forced to invest in a dedicated PC, compatible accounting software and spent hours leaning how to use it in order to comply. It would be a nightmare for small business and single operators. I am too busy actually doing my job to have to grapple with accounting software every day !

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8 months ago
Lloyd Anderson
The GST proposal to use accounting software will only put more cost on small firms or clubs as we do not use accounting software and will not because of the cost

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8 months ago
Balu mistry
Good idea and support to file GST return from software. However at this stage do not make it compulsory for all businesses as many cash businesses such as diary/takeaway do not use accounting software. Gradual introduction on voluntary basis will be logical.

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8 months ago
Dan Gerard
I support the option of filing my GST Return in my accounting software and not having to replicate this information again by logging into IRD and resubmitting it all over again. I wouldn't want this to be compulsory because maybe not everyone agrees.

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8 months ago
Ron Frew
I am a small sole trader and would be very unhappy if I had to purchase and learn how to use accounting software. my Microsoft Excel spreadsheets are more than adequate for the accounting task required for GST and Provisional tax. I think the IRD's present online return system is very well done and should not be stopped. There should always be options, particularly for us small businesses. Logically as we grown then accounting will be too much ad the new systems for larger entities may be the logical progression. I am ALL for everyone to pay fair tax, there are those out there who abuse the system and get away with it. Fix those laws first please.

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8 months ago
Michelle
yes please!

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8 months ago
R A J White
My accounting system prints a GST RETURN in exactly the format required for a had copy return. I then have to copy the data into online GST return. If the return from the accounting package (Accomplish Cash Manager) could be directly uploaded to IRD, it would save me a bout 10 minutes per month and at least two A4 pages of print.

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8 months ago
Paul Walbran
Absolutely oppose to mandatory use accounting software to file GST returns directly to Inland Revenue. All very well if you have a software package that's compliant and staff trained to do the job, but if (like most small businesses) you haven't even the time to check whether your software is compliant it's another red tape nightmare-in-waiting. The current format is fine: takes 10 minutes to complete, so what's the problem? The bulk of the work needed for a return is record keeping that's needed for prudent business management. Whatever software we use shouldn't be an issue, the result that it produces is all IRD needs. For small businesses the cost, distraction and hassle of moving to any new software far outweighs the benefits on many occasions. Let us chose what works best for our various businesses rather than be straight-jacketed into some standrdised templet which forever needs updateing and training (aka make-work for the IT industry). PS I presume that oif this daft idea did get wings there would be a totally open and transparent way of determining the preferred software. Otherwise conspiracy theorists would have a field day!

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8 months ago
Justine
It would be great if we could submit GST returns via accounting software but I wouldn't like to see this as being compulsory as I suspect there are a number of businesses out there that don't use accounting software.

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8 months ago
Annee spencer
yes i agree

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7 months ago
Ronise Paul
Yes, we should be moving towards more electronic processing and being able to submit your GST returns directly from your accounting software would result in time and cost savings

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8 months ago
Peter Huebner
I see little merit in this suggested change. The burden with the current system is that I have to spend half a day every other month entering all my transactions into my software - not the interaction with the IRD. The former takes all the time, the concentration, having to go over everything all over again if reconciliation is out by a cent. The latter means opening a website, putting in 6 figures, ticking a box and sending it off ... less than 5 minutes. Fine, if I had software that were able to interact with the IRD that would not hurt me, but it would save me less than 5 minutes every other month, offset by the cost for the software. I use my own in-house written software which is NOT able to interact with anything outside my computer, and I do NOT want to have to buy anything else. The whole idea strikes me as 'change for the sake of change' with no significant benefit to anyone in real world terms. It certainly does not make sense economically speaking.

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8 months ago
Marc Wilson
I use Xero already so would be great to just submit from there rather than manual double entry into IRD (which I sometimes forget to do). For those with further calculations required, it seems their accountant does that anyway and so accountant will benefit from submitting directly. It should remain an option to enter online on IRD site for those without appropriate accounting software.

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8 months ago
Hans
Absolutely support this. It is a no brainer.

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8 months ago
Sharlene
I have a one person business and use Xero. If the GST capability was integrated into Xero as an added feature it would be excellent. Save double handling. I already love the time efficiency of doing everything online and my accountant can access it direct any time if I need help. Going direct with IRD for GST would be a bonus in my books.

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8 months ago
Suse
I fully support IRD integration with approved software platform providers. Seems crazy to have to go through two steps to calculate this and then have to separately manually type it into MyIRD. Agree it should be optional and agree there should be some latitude for mistakes and/or accountant oversight.

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8 months ago
Regina Niechcialkowski
Any online filing etc. should be totally voluntary - I prefer manual filing as it is much quicker for me

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8 months ago
Rachael
As the treasurer of a small (pretty much self funding) charity that pays one person on a part time basis it would be good if we could opt out. The cost of initiating and sustaining an accounting system compatible with the IRD for the small amount of money we pay out is way out of proportion to any benefit for us.

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8 months ago
Aston Distribution
as a small business owner I support the OPTION to do this but don't think it should be compulsary. The accounting software I use is set up to make the process as simple and accurate as possible but integration would save me time and reduce the chance of transposing errors.

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8 months ago
Ann Mayer
I believe that changing the current format of GST could cause costs to small business. Although I am quite happy to file on line, my current accounting software would probably not support it being done automatically. Refunds direct to the account is the only viable option for me. I hate getting cheques.

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8 months ago
David Frank
Yes, this would save time double handling – having to export a report from my accounting software then manually entering the data into a different format on the online IRD form. Would be appreciated, thanks.

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8 months ago
Jane Napper
My business is very small - just me - and I don't use any accounting software and I have no wish to do so.

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8 months ago
Maria Da Vanzo
We run a very small business with no payroll and no accounting software (that's what the accountant is for). I would not welcome having to pay for accounting software just so I can file a GST return.

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8 months ago
Simon Farrell-Green
1. Yes I completely support this. I am a sole trader and use Xero for everything, but then have to manually copy information across to the IRD's system and wait for it to be approved. Being able to do this out of Xero would be fantastic. A caveat – I do not support being required to provide any more information than required to at present – this would mean more administration, not less. 2. One of the most powerful things about cloud accounting systems such as Xero is that you reconcile more often than you would with a paper system, and receive "real time" information on your financial position. I reconcile daily, and analyse my tax and GST obligations at least once a week. I then pay my GST weekly, which means I'm always up to date and am never more than $200 behind my "real" GST position. Gearing the IRD's system towards such micro payments (they don't show in the IR system until the end of the tax period, for instance) would be a huge bonus for small traders such as me. Similarly, allowing smaller GST filing periods – say, monthly – would better suit many small businesses who get paid monthly but often have variable cashflow.

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8 months ago
Monique Princen
Optionally being able to submit GST from accounting software can reduce compliance cost but it would need to be a deliberate step which must be separate from the creation of the report to support those organisation where authorisations are required for the filing.

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8 months ago
Robyn N.
I am opposed to having to purchase an accounting system to file our GST return as we are a small business. It needs to be voluntary

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8 months ago
Kieron Gray
Gotta be the worst Website ever NZ Govt !! Took AGES to find the option to post a comment ! GST is fine as it is. I don't want to pay for some software to make it easier .... I'm a one mane band and I like it as it is.

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8 months ago
Mark Dixon
GST filing direct from my MYOB system would be great. Any refunds paid by direct credit to a nominated account would also be fine.

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8 months ago
Ashok Bhat
I do not think this should be made compulsory as a lot of people (such as myself) are registered for GST (although the present size of business is smaller than the minimum threshold for GST) and do not have accounting software as the business cannot afford it. Electronic submission of GST returns is fine but not compulsorily through an accounting software that links with IRD, which should be optional, not compulsory.

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8 months ago
Gaylene Underwood
I do not support the software automatically filing our returns. There are often adjustments, whether it be accruals of invoices not yet entered, and then reversals from prior adjustments, or just plain errors that need correcting. Filling in the form is not that difficult or time consuming.

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8 months ago
Kevin Kevany
Having run businesses in a few other countries at different times, I can certainly confirm this is the easiest and slickest (you even do the calculations for us) I've dealt with. My concern is that my software is so basic that your system, esp after your upgrades are complete, might just cause it to hiccup and spit mine out! Lets add your suggested link-up but give us small-fry the few numbers that we have to input and you carry on with the calcs.

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8 months ago
Daniel Compton
Doing this all from Xero would make life a lot simpler, and less error prone. It wouldn't save a huge amount of time (say 30 minutes every 6 months), but it would lower my stress levels when I do my taxes.

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8 months ago
Deb
I support the ability to enter GST direct from accounting software, as long as it is voluntary.

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8 months ago
Andrea
1. For those of us in CA or tax agent offices, already using appropriate software it would only need 1 more step - transferring the data to GST return. Would save no time at all as the GST return is really easy to do through our software already. 2. I thnk there will be security issues - the people pressing the transfer/send buttons would need to be digitally authorised.

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8 months ago
Mark
This feature should be optional. I personally find the process of filing a check exercise to ensure accuracy.

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8 months ago
Steve Beston
Hi There, Many small businesses such as mine do not run an accounting system so it would be important to maintain the option of filing a return separately.

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8 months ago
Matthew Jenkinson
As the developer of a simple accounting package it sounds like it might be a useful option for our software to be able to send GST returns to IRD via the Internet. However in our experience businesses use a variety of means (including non-electronic) to track their financial information and the process of consolidating this into a GST return normally requires some extra thought and manual intervention. If we were to provide an option to submit GST returns electonically we would essentially be reproducing functionality already provided by IRD on their website. And we think the cost of the extra work to maintain our software would be hard to pass onto our clients. So it sounds like a good idea but on closer consideration we don't think it is.

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8 months ago
Andy Bloomer
I am a very small business (sole practitioner consulting engineer). I do not use accounting software so the proposal would not affect me, I think. I use a spreadsheet to record and handle my accounts and to calculate GST. I file returns on line bi-monthly using this system. I have an accountant who files (and audits) my accounts annually and determines my other tax obligations. I find the current system very simple. I probably spend two or three hours every two months reconciling accounts and bank statements and filing GST returns. I doubt that this can be reduced much.

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8 months ago
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