2020 financial year: Automatic tax refunds for wage and salary earners
There are going to be a few changes for this up and coming financial year (2020). From the 1st of April 2019, individuals on a wage/salary will have their PTS (or Personal Tax Summaries) completed for them automatically by the IRD.
The Inland Revenue (IR) department expect that about 750,000 tax refunds will be automatically generated for wage and salary earners who don’t usually apply to get their tax back.
“Did you know IR revealed there was just about $183 million of tax refunds sitting unclaimed?” (stuff, 2017)
In the new system all wage and salary earners’ tax will be calculated and refunds sent automatically.
- If you’re due a refund? You will be automatically notified and the refund will be processed. Make sure you have your bank account details updated through MyIR.
- If you owe money? You will also be notified of amounts outstanding and any underpayment in tax will have to be paid to IR.
Put simply, IR will now look at the information they have about an individual and if they’re confident they have all of your information, they’ll calculate and finalise your tax position for the year and generate an automatic refund so there’s no need to file a PTS. Which makes it a very simple process for wage and salary earners.
We suggest you sort out your MyIR account if you haven’t already. This is the hub between you and Inland Revenue. Any correspondence from them will be received through here. If you’re receiving emails about refunds/payments owing in your email inbox? That’s a scam and you should definitely ignore it.
If you earn other income other than a PAYE job? Well it would be best to talk to your accountant about what these changes mean for you and your situation.
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A side note - because of COVID they are writing off tax bills for automatic tax assessments under $200. The next financial year this will reduce back to $50.