Inland Revenue (IR) is trialling a new service to contact and help customers manage debt.

The pilot will see IR’s current third-party provider contact about three thousand customers who have a tax debt of less than $5,000.

Why do this pilot?

Spokesperson Jane Elley says there are a significant number of people with simple, low-value tax debt who IR isn’t able to contact one-to-one without the help of a third-party provider.

“We want to try to stop penalties and interest piling up on people and we also want to continue to find cost-effective ways to collect tax from those who owe it. We want to know if using a third-party provider is an efficient and effective way to support customers get their debt sorted,” Jane Elley says.

“We’ve worked successfully with Baycorp for a number of years collecting student loans overseas – that’s why we’ve selected them for this pilot. We’ve carefully considered the privacy concerns in Baycorp undertaking this work, and we’ve wrapped appropriate security and legal protections around it.

“We’re confident in the steps they have in place to protect taxpayer privacy.

“They will contact customers (email, SMS, and phone), confirm the debt, and promote IR’s self-service options, taking the customer through these steps. Where self-service is not enough, customers will be referred to Inland Revenue.

Concern about scam messages and calls

Many people are worried about scam calls and concerned about online security.

“If someone is worried about the authenticity of the caller, they can call Inland Revenue on 0800 775 247 to confirm. there is also information online Baycorp pilot programme.

“When contact is made, Baycorp won’t ask people to click on a link to get to their accounts. There’ll be no asking for credit card or bank account details; no threatening sudden arrest or pressure anyone to act immediately; and no asking for passwords.”

What information is being shared with the third-party provider?

Inland Revenue will only be supplying the information to enable conversations around payment resolution.

They are:
• Full Name
• DOB
• Contact Details including phone number, email, and physical address
• Specific Tax Type and amount of outstanding debt
• Last Contact date with customer
• Last payment date and amount and how this was made (no account details provided)

All third-party staff who work on Inland Revenue specific work must sign a certificate of confidentiality. The debt always remains with Inland Revenue and Baycorp cannot use the information it receives from us for credit rating purposes. Payment for this work is a fixed fee per case, regardless of contacts or outcome.

The pilot starts today and runs for 5 months.

Today (May 12) marks the fifth anniversary of the Small Business Cashflow (Loan) Scheme, and the point where loans should be paid off.

The loan was made available to business owners from 12 May 2020 to help small to medium businesses affected by the COVID-19 pandemic.

More than 129,000 businesses were issued loans totalling $2.4 billion. The average amount approved was $17,000.

Most loans were taken out in the first few months of the scheme (May and June of 2020), with a 5-year repayment period.  Many are now reaching their cut off point.

From next month, Inland Revenue will default a loan if it has not been paid off. Default interest (calculated based on use of money interest of 10.88% plus standard interest rate of 3%) will be charged.

As of 30 April 2025, 64,000 people had repaid their loan in full, with a total loan balance of $853 million still owing.  Approx 14,300 customer’s loans are in default, owing just over $242 million. IR is actively taking steps to recover these defaulted loans.

IR is also alerting customers who are behind on their repayment plan and remind them that repayment is needed.

Since February this year we’ve tried to contact more than 1,500 customers who have defaulted loans and tax debt. As a result, we’ve recovered almost $10 million of SBC and tax debt from these customers.

Almost 20% have entered into an arrangement to pay the debt; 30% had a deduction notice placed on their debt to collect it directly from their bank account and 33% have made lump sum payments.

We are also reiterating that there are consequences, such as default interest being added to the balance and legal action, if the loan remains unpaid.

Customers can also check their loan balance, repayment plan and make payments in their myIR.

For any changes to a repayment plan or any changes in circumstances, customers can also contact IR through the secure channel in their myIR account to discuss options.

If you are a New Zealand business seeking overseas investment, there are new requirements you’ll need to follow. Find out about the changes and what you need to do.

When: From16 June 2020

What: Changes have been made to rules that impact New Zealand businesses looking for overseas investment. The changes include:

• a new requirement to notify the Overseas Investment Office (OIO) about overseas investments, and
• a new national interest test that will apply to some investment transactions.

OIO will need to be notified about all overseas investments that will result in:

• more than 25% of a New Zealand business or its assets being owned by investors outside of New Zealand, or
• an increase to an existing holding beyond 50, 70 or to 100%.

A new national interest assessment will apply in rare circumstances to evaluate whether an overseas investment in sensitive and high-risk assets are in New Zealand’s national interests.  

Changes also mean the application process for lower-risk investment transactions is simplified, and some transactions will no longer need consent.

Changes to the Overseas Investment Act (external link) — Overseas Investment Office

Who: New Zealand businesses seeking overseas investment.

Why: Overseas investment can support New Zealand’s COVID-19 economic recovery, so that businesses can continue to grow and evolve, and keep more New Zealanders in jobs. The right checks and balances are needed to protect businesses that are important to New Zealand’s national security, economy, and communities.

What you need to do: If you are seeking overseas investment, be aware of the changes to when the OIO needs to be notified, and that a new national interest assessment might apply to overseas investors wanting to invest in your business.

Businesses seeking investment should get advice from their advisors, for example a lawyer or accountant.

Paid parental leave is extending from 22 to 26 weeks from 1 July 2020. Here’s what you need to know.

When: 1 July 2020

What: Paid parental leave will increase from 22 to 26 weeks. You are already required to provide job-protected parental leave to eligible employees for a minimum of 26 weeks if the employee meets the 6-month employment test (who’ve worked for you for at least an average of 10 hours a week for six months or more). For employees who meet the 12-month employment test (who’ve worked for you for at least an average of 10 hours a week for 12 months or more), the period of parental leave you are required to provide is 52 weeks.

Parental leave

The ‘keeping in touch’ allowance is increasing to 64 hours. These hours allow an employee to work a limited amount of time during the paid parental leave period, without losing their entitlement for payments. This arrangement needs to be agreed to by you and your employee.

Why: To provide increased support for primary carers including working parents with newborns and families taking on the permanent care of children under the age of six.

What you’ll need to do: This change doesn’t require you to provide additional leave. Just be aware that eligible employees who take parental leave will be paid for 26 weeks and can arrange to work up to 64 hours of ‘keeping in touch’ allowance.

The Government is moving to ease financial stress for around 149,000 taxpayers by changing the rules around write-offs for tax debt.

“Fewer people will have tax bills to pay this year,” said Revenue Minister Stuart Nash.

“Inland Revenue’s end of year automatic income tax calculation process for individuals is currently underway and is expected to run until early July. It is the annual wash up which results in people either having tax to pay or receiving a refund. 

“For the 2019-2020 income tax year, tax payable up to $200 will be written off. The usual threshold for writing off tax is $50.

“Increasing the write-off threshold will reduce tax bills for approximately 149,000 taxpayers. Writing off those amounts of tax may not seem huge to everyone, but it can be significant for someone experiencing financial stress.

“In the 2018/19 year for example, around half of those who had a tax bill up to $200 were earning less than $60,000 a year. We’re doing everything we can to help households as we move into the economic recovery phase.

“The auto-calc process has meant that people have already started receiving refunds. As at 10 June, there have been 2.3 million assessments carried out resulting in $586 million in tax refunds and $118 million in tax bills to pay.

“Once the process is complete, Inland Revenue expects to issue refunds in excess of $650 million as part of individual income tax assessment process.

“This change was agreed last week but legislation is still required to amend the returns for the 2019/20 tax year. For following tax years, the threshold will revert to the $50 limit,” Mr Nash said.

The auto-calc process applies to people whose income is only salary, wages, interest or dividends, not those who use the IR 3 tax return.

Inland Revenue is warning customers to be wary of scammers during the 2020 tax refund season.

Between Mid-May and July, IR automatically processes and pays out tax refunds. It is also when scammers may try to scam you.

This year IR will send around 2.5 million automatically assessed tax refund notices during that time, using both customer’s myIR accounts and through the post. These will be sent out in daily batches, Monday to Friday, between mid-May and the end of July.

Scammers know this as well and target this time of the tax year to try to rip people off and gain access to bank accounts and other personal information.

Here’s what IR will and won’t do when we send out the tax assessment notices.

Inland Revenue absolutely will let people know if they have a refund by sending an income tax assessment.

We will only pay funds directly in to the bank account we have on record and we will ask people to log in to their myIR account from www.ird.govt.nz 

We will ask for bank account details if we don’t have them but importantly, we will always ask people to provide these in a secure way – using their myIR account or through our call centre. 

We will also give people until February next year to pay any bill.  A bill won’t have to be paid immediately.

Inland Revenue will never put a dollar amount of a refund in an e-mail or txt message and will not ask for your credit or debit card details in order to  pay a refund.  We will also never ask you to reply to an e-mail or txt message to provide your bank account details.

IR will also never speak to customers threateningly.

New provisional tax option for small businesses

Small businesses that have turnover of less than $5 million a year can work out their provisional tax using the accounting income method (AIM).

AIM uses new functionality included in approved accounting software to work out payments. You can continue to use another provisional tax option if you think your business won’t suit AIM. It will suit your business if you have:

• irregular or seasonal income
• accounting software or want to start using accounting software.

Once you’ve opted in to AIM you’ll only pay provisional tax when your business makes a profit. This will help you to avoid cash flow problems.

As long as you make your payments in full and on time, there is no exposure to use-of-money interest. If your business makes a loss you can get your refund straightaway rather than waiting until the end of the year.

Changes coming to property market: Property Institute

Property Institute of New Zealand Chief Executive Ashley Church says the impact of the election on the New Zealand property market can already be largely predicted – even though the final make-up of the next Government could be weeks away.

Mr Church says that the role of NZ First as ‘King or Queen maker’ in coalition negotiations means that much of what is likely to happen is predictable because New Zealand First policy positions will feature whether National or Labour is ultimately chosen as a coalition partner.

“While the coalition talks are all about negotiating positions – Peters will have considerable leverage over both parties – so there are some bottom lines that we can reasonably expect to find their way into any final agreement”.