Gilmore Taylor Associates Ltd Blog

A phishing campaign containing malware is targeting business banking customers of some New Zealand banks.

The phishing emails are branded to look like invoice notifications from accounting software systems. Once a user clicks on the attachments or links in the email, malware is downloaded onto the user's machine.

The phishing emails may have been sent up to three months ago.

Click here to find out what's happening.


Planned contacts with employers about payday filing

This is to let you know that Inland Revenue will be sending emails and letters to all employers on the 15th of October.  They'll be reminding you of the shift to payday filing by 1 April 2019.

They will also be calling employers from late October 2018 through to April 2019 to encourage employers to shift early and talk them through the process.

If you are using payroll software, this may not yet be updated to allow for payday filing, your software provider should be keeping you up to date with the progress.

Please contact us if you require any further information.


Government ramps up R&D tax incentive

The Coalition Government is backing businesses to succeed with a new tax incentive that aims to unlock further spending on research and development.

Research, Science and Innovation Minister Megan Woods and Revenue Minister Stuart Nash today announced the design of the research and development (R&D) tax incentive following extensive consultation with businesses.

"We listened to the business community. We ran a thorough consultation process and as a result we have made significant changes to the tax incentive originally proposed. The rate will be higher, the threshold lower, and the definition more inclusive.

"This is a huge opportunity for businesses to invest in R&D, which will help us increase our productivity and boost wages.

"We pride ourselves on being an innovative country, but our spending on R&D lags behind many of our international competitors, and this Government is not content to languish at the bottom of the table. That's why we've set aside $1 billion for this incentive.

"Work to increase R&D spending to two per cent of GDP over 10 years was part of the Coalition Agreement between Labour and New Zealand First. This incentive puts us on the path to achieving this goal," said Megan Woods

Revenue Minister Stuart Nash said these features struck a balance between including as many businesses as possible in the scheme, and upholding the integrity of New Zealand's tax system.

"We have learned from international best practice how to incentivise R&D expenditure and retain trust and confidence in the tax system. The new policy meets the rigour of international schemes, and will support businesses to undertake genuine R&D.

"We received a lot of feedback from businesses that it was particularly important to include a form of refundable tax credits for start-ups and loss making businesses in the first year of the tax incentive. This is why we have introduced a temporary measure that will mirror the current R&D tax-loss cash-out scheme.

"I can assure all businesses that having a more comprehensive form of refunds in the R&D tax incentive is a high priority to have in place for the 2020 tax year," said Stuart Nash.

Help shape ACC levy rates for 2019-2021

Help shape ACC levy rates for 2019-2021

All Kiwis are invited to have their say on the proposed changes to levies before the ACC Board makes its final recommendations to the ACC Minister for a decision, says ACC Board Chair, Dame Paula Rebstock.

"ACC encourages everyone to make a submission on any aspect of what's being proposed, and provide their insight into where ACC should be focusing its future efforts."

Levy proposals

The proposed levies are generally lower than those forecast in 2016. The proposals for the 2019-2021 levy period include:

·         decreasing the average work account levy for employers from $0.72 to $0.67 for every $100 of liable earnings. This is a decrease of 6.9%.

·         increasing the earners' levy for workers from $1.21 to $1.24 for every $100 of liable earnings. This is an increase of 2.5%.

·         increasing the average motor vehicle levy for road users from $113.94 to $127.68 including a proposed increase of 1.9 cents per litre for petrol. This is an increase of 12.1%. 

Drivers of change

"Since we last adjusted levies in 2016, the number of claims for injuries has grown by 6.4%, with more people than ever needing our support," says Dame Paula Rebstock.

Pressures on costs include:

·         increasing medical costs

·         increased costs for care and support workers resulting from the pay equity settlement agreed by Government

·         the introduction of free doctor visits for under 14s

·         increases in weekly compensation claims.

"In addition, the impact of lower interest rates on our investments, and higher inflation forecasts will have a significant influence on future costs. These factors need to be reflected in the levy rates now to ensure that we can support our clients' needs throughout their lifetime."

"Despite the cost pressures, our investment in injury prevention and ongoing changes to the way we work are having a positive impact. Over the past two years, we've also achieved higher investment returns than forecast.

"This is helping us to manage increasing costs, and, with the exception of the motor vehicle account which is slightly higher than anticipated, we've kept levies from increasing as much as we had thought in 2016," says Dame Paula Rebstock.

Lower than predicted

Prudent management is helping to keep levies from increasing as much as ACC anticipated in 2016.

Work levy

ACC has been able to reduce the work levy for employers and self-employed because people requiring weekly compensation are returning to work sooner than expected and over the past two years we've achieved higher investment returns than we had forecast.

Earners' levy

People are tending to lead more active lives, exposing themselves to greater risk. This leads to more claims, which increases the need to raise levies.

However, the proposed levy is significantly below ACC's original forecasts in 2016, where ACC predicted that an increase of 9% would be needed for the levy we collect from Kiwi wages ($1.32 per $100 of liable earnings) to pay for increased treatment and compensation costs.

"It is also considerably below what workers were paying in 2011 and 2012 when the Earners' levy peaked at $1.78. That's 44% higher than the rate of $1.24 we're proposing for the next two years."

Motor Vehicle levy

The cost of supporting injured customers has continued to increase. The biggest driver has been pay equity.

However, for road users, the increase is significantly below what motorists had to pay in 2013 and 2014 when the average Motor Vehicle Account levy peaked at $333. That's more than $200 higher (161%) than the rate we're proposing for the next two years.

Have your say

ACC is taking the consultation to the streets of New Zealand with a roadshow to nine towns and cities featuring a new 'Ask the Nation Station'. It's an 'out-of-the-box' way of getting out to communities to encourage comment and participation.

You can find out more detail and provide your feedback on our consultation website.


Student loan borrowers starting to get on top of their debt

Student loan borrowers based overseas are showing a greater commitment to paying off their debt, latest figures reveal.

Loan repayments by overseas borrowers are 40% higher than four years ago and as a result, this eagerness to do the right thing is slowing the rise of debt in default.

Inland Revenue customer segment leader Bernadette Newman says people are becoming more aware that their student loan obligations don't end when they leave the country.

"No one wants that feeling of returning home only to find their student debt has spiralled out of control due to non-payment penalties and interest.

"Luckily, it's never been easier to pay off your student loan while working overseas. There is a range of fee free options that makes it much more convenient to set up regular payments.

"The difficulty of sending money home was previously a big barrier for borrowers but since that's been removed by using our free service fee options, we've seen a steady pick up in overseas repayments."

One of the big due dates for student loan borrowers overseas is September 30.

Ms Newman says now is as good a time as any to remind family members overseas to log-in to their myIR accounts, check out their balance and then encourage them to make a dent in it.

"The smart thing to do is keep up with small and regular instalments to avoid having to pay late payment interest when you default."

Fewer borrowers are defaulting on their loans and the rate of increase in the amount of default debt has slowed by half over the past four years.

"The amount of debt in default at $1.32 billion remains significant," says Ms Newman, "but we're hoping that the change in attitudes we're seeing and the fact more ex-students are taking ownership of their loan balance, will slow any further growth in that figure.

"We're seeing the majority of the borrowers do the right thing but there are still some people who have consistently avoided and ignored their loan obligations over a long period of time.

"Inland Revenue is tracking down more of these borrowers all the time so it always pays to make contact with us and get back on track before we contact you."   Find out just how easy it is to pay off your student loan at


Inland Revenue firmly focused on bright-line – Richard Owen

Any suggestion that Inland Revenue has taken its eye off the ball when it comes to property investors is thoroughly misleading.

Just under 100 Inland Revenue compliance specialists are focussed on making sure property investors are aware of their tax obligations – including the bright-line test.

The Property Compliance Programme was first established back in 2008. Some big changes this year in the way we work saw many of the job titles changed but the focus has stayed the same.

Enforcing the bright-line rule is a priority among those working on property compliance and they're following a comprehensive strategy designed both to help customers meet their obligations from the start and to catch the cases where no profit is declared from a sale.

We find that in the majority of cases our customers want to get their tax affairs properly in order. Inland Revenue compliance staff aim to make it as easy as possible for customers to comply by focusing on supporting them upfront, before issues arise, rather than just responding to non-compliance when it happens.

Unfortunately, there will still be some customers who ignore those messages and fail to comply. It's highly likely those people will be picked up in our audit work, which is intensifying over the next year.

Customer awareness

The bright-line rules came into effect in October 2015 and we're finding many customers remain unsure of their obligations. 

Awareness appears to be building all the time. Following the government's decision to extend the bright-line period from two to five years, Inland Revenue ran social media promotions and newsletter drops pointing to updated information on our website. The marketing was specifically targeted so that customers with a property interest knew about the change.

During the month-long campaign our social media content reached over 200,000 people and approximately 40,000 people visited the bright-line campaign webpages, which has links to all the information they need to know.

Focus areas

Property speculation is a centre of attention, especially in and around new developments, infill housing, regional hot spots and properties that have been sold within a short duration. Additional revenue of $117 million was assessed in the 12 months to June 30 2018 as a result of audit activities on property compliance issues.

Bright-line, is of course, an area of particular focus and along with ongoing audit activity, data analytics techniques are being used to identify our bright-line cases early. This allows us to target our interventions to help our customers get it right from the start.

In 2017–18, over $7 million of Resident Land Withholding tax was deducted and paid from properties sold by overseas-based vendors who are subject to the bright-line test.

Using real time data to help customers comply

New processes have been developed to allow property transactions to be monitored in real time. This helps compliance staff develop an early reading of trends and hot spots so they can monitor and make initial judgements about whether a customer is complying with tax rules.

Data from Land Information New Zealand help us determine the amount of tax that's likely to be due. This information is then used to remind property owners so they can understand what to put on their tax return.

The data also reveals the customers who have bought and sold residential properties within two years and have not claimed an exemption on the tax statement provided with the sale. Again, contact is made with these customers to discuss their filing requirements so that they comply with the bright-line obligations voluntarily.

Bringing in the tax revenue from a property transaction is a long game. Depending on the point at which a property is sold, it can be up to three years before Inland Revenue receives the payment. Separating out the revenue that's collected from a bright-line transaction is difficult to report as currently the taxpayer is only required to list it as amongst 'other income' on their tax return.

Compliance with the bright-line rules is improving all the time. We expect this to continue as more customers have greater certainty about their obligations and our property compliance specialists will remain on hand to help them get it right.


Be ready to shift to payday filing

Be ready to shift to payday filing

The time is now for New Zealand employers to get ready to shift to payday filing.

From April 1 2019 all employers will have to file their employment information every payday.

Inland Revenue customer segment lead Richard Owen says the easiest way to comply is through payroll software.

"The first step is for all employers to start asking their software providers when they expect to be ready so planning can begin.

"This is the sort of task where it pays to be ready early rather than scrambling at the last minute.

"Inland Revenue's systems for receiving payday information are up and running, so companies who want to can start filing straight away. If they're using software they need to make sure it's compatible first."

More than 400 employers are already payday filing but there are many thousands more that will need to join them before April 1.

Payday filing will replace the employer monthly schedule (EMS), which currently needs to be filed either in my-IR or through the post.

Those with compatible software will be able to securely submit their information directly to Inland Revenue instead of having to do a separate file upload in myIR.

Employers who deduct $50,000 or less in PAYE and Employer Superannuation Contribution Tax (ESCT) will be able to file on paper, though only from April 2019. All other employers will need to file electronically.

Mr Owen says payday filing will have a transformative effect both on businesses and their staff.

"Businesses will be able to integrate their tax obligations into their regular payroll cycles, while the more timely information will allow Inland Revenue to provide certainty around an employee's social entitlements such as Working for Families Tax Credits."


750,000 automatic tax refunds for wage and salary earners next year – the biggest tax change in 20 years

Inland Revenue (IR) expects that next year, about 750,000 tax refunds will be automatically generated for wage and salary earners who don't usually apply to get their tax back.

Speaking to the Finance and Expenditure Select Committee (last Wednesday), Inland Revenue Commissioner Naomi Ferguson said that, subject to legislation before the committee being passed, this would be the biggest change to individual tax in nearly 20 years.

Ms Ferguson said it hasn't been mandatory for wage and salary earners to fill out an IR personal tax summary (PTS) but if they had and it had indicated a refund, they could have filed a return and received that refund.

"In the new system all wage and salary earners' tax will be calculated and refunds sent automatically," she said. "About 110,000 more, who also haven't been filing, will have an amount to pay – they'll be notified automatically."

"Getting a refund, if you're entitled to one, will be a whole lot simpler because it will be done for you," she said. "The only reason for contacting IR now will be to tell us about any additional income information that we need to know.

"Put simply, IR will now look at the information we have about an individual and if we're confident we have all their information, we'll calculate and finalise their tax position for the year and generate an automatic refund - so there's no need for a PTS, making it a very simple process for wage and salary earners.

"But it's still a big change from what so many people have become used to.

"It will be very important that everyone has made sure the details we hold about them – bank account number, contact details and so on – are fully up to date so the new system works well for them. We'll be communicating widely to make sure customers know what's changing, when, and what they need to do," she said.

Other changes that will come into effect from April 2019 include:

  • making it easier to manage income tax and Working for Families, which includes some changes to myIR for both businesses and individuals
  • reporting of PAYE information every payday for employers – which is now voluntary – becomes compulsory, and
  • more regular reporting of investment income information becomes voluntary – and then mandatory a year later.


Domestic Violence - Victims Protection Bill becomes law

The Domestic Violence - Victims Protection Bill has passed its third reading in Parliament. It aims to enhance legal protections in the workplace for people affected by domestic violence.

The changes will come into effect on 1 April 2019.

The new law entitles employees affected by domestic violence to up to 10 days of paid domestic violence leave per year, in order to deal with the effects of domestic violence. Employees will be able to take this leave as needed – similar to the existing sick leave and bereavement leave provisions.

They will also be able to request a short-term variation to their working arrangements (up to two months or shorter) to which the employer must respond to urgently and within 10 working days. The variation can include changes to hours of work, location and duties of work. This is similar, and in addition to, the existing rights employees have to make a flexible working request.

The law also explicitly prohibits an employee being treated adversely in their employment on the grounds that they are, or are suspected to be, a person affected by domestic violence.

Employees will be able to raise a dispute if they believe that their employer unreasonably refused a request made under the new provisions, and must do so within six months.


Beware of sophisticated email scam

Beware of sophisticated email scam

A sophisticated email scam is doing the rounds using Inland Revenue branding to trick people into giving up their credit card details.

The email usually claims the recipient is due a large tax refund and then asks them to click on a link to another website where their money can supposedly be claimed.

Inland Revenue Chief Information Security Officer Doug Hammond says the email looks very convincing but there are a couple of important details that give their game away.

"Firstly look where the email is from. If it doesn't come from an address that ends with then be very suspicious.

"Secondly look at the link where they are trying to direct people to claim the refund. Hover over the link with your mouse and make sure the web address is for a real Inland Revenue website. Don't click on it.

"We send out emails all the time but customers should be aware what a fraudulent one looks like."