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Amending assessments

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While the focus is on getting the assessment right from the start, there will inevitably be situations when taxpayers will want to amend or correct their initial assessments. 

The current process for taxpayers imposes significant compliance costs on taxpayers and administration costs on Inland Revenue.  The Government is proposing changes to make it easier for taxpayers to make minor amendments to assessments in subsequent returns, rather than requiring taxpayers to correct the original assessments:

  • Remove the criteria: The first option is to remove the current criteria that determine when an amendment is minor, and instead rely solely on a monetary threshold.  This would remove the need for determining whether an error is a clear mistake, simple oversight, or mistaken understanding by the taxpayer. 
  • Supplement the monetary threshold: The second option being proposed is to supplement the single monetary threshold (proposed to be increased to $1,000) with an approach that relies in some way on the significance of the error to the taxpayer.  This would allow taxpayers to include any error in a subsequent return if the amount of the error was equal to or less than both $10,000 and 2% of their taxable income or output tax for the relevant period (as appropriate).  It would be optional for taxpayers.

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