PAYE filing is changing

From the 2019 tax year (starting 1 April 2018) Inland Revenue is introducing some significant changes to the filing of payroll deduction returns. The new system is optional for 2019 but will become mandatory for 2020.

Under the new system, employers will be required to file payroll information after every pay run. This means if you pay your staff weekly, you will be required to file a return every week. Payment of payroll deductions to Inland Revenue will still only be required monthly on the 20th of the month following.

Inland Revenue says the new system is being introduced to make use of advances in software and information technology and to allow Inland Revenue to have more timely information about people’s earnings in case corrections to deductions have to be made.

A large number of small businesses and community organisations do not use e-filing capable payroll software at present, and the changes will mean an increase in compliance costs and effort for small organisations, while at the same time increasing the market for accounting software companies such as Xero or MYOB. Last December, Inland Revenue has taken the unusual step to post letters and emails to businesses and organisations urging them to adopt accounting software.

 

 

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