Why Inland Revenue is taking money from bank accounts
Thousands of people have had money deducted from their bank accounts in recent months as Inland Revenue steps up its efforts to collect the tax it is owed.
IR spokesperson Rowan McArthur said it had sent out 16,500 notices about planned bank deductions since mid-June, 25% more than for the whole of last year.
"We are targeting customers who have repeatedly not engaged with IR; and those where information we have indicates there may be funds in their bank account(s) that could be deducted from to pay off existing tax debt."
He said IR was also working to get instalment payment plans in place.
"As with all tax debt, we welcome customers contacting us so we can work with them to resolve their debt situation."
Between mid-June and September 30, there had been 8181 deductions completed, which had recovered $17 million. There were another 6026 deductions in progress, which had collected $5.5m.
John Cuthbertson, Chartered Accountants Australia New Zealand tax leader, said tax debt had ballooned in recent years and the "softly, softly" approach taken over the Covid years meant many people were given significant leeway with their tax bills.
"Tax debt as of March was $9.3 billion. When you think about it that's a significant amount of money. If you look at Budget 2024 and 2025, funding was allocated specifically for IRD to be more aggressive in terms of audit activity… debt is the focus and they certainly don't want to let it get any larger."
He said some of the debt was quite old and some IRD was trying to collect quickly before it became non-collectible.
IRD also had the power to apply to have money taken from people's wages if they were employed, he said.
"It's in people's best interest to get on top of their debt as early as they can and communicate. But we've had situations where employers or companies have used Inland Revenue as a bank by not paying some of these core taxes like GST and their PAYE - that's held on trust for the Crown. That means they've been living beyond their means, really."
Some accountants told RNZ it seemed people were only given a week's notice before money was taken, and it was tough for some businesses that were struggling.
Deloitte tax partner Robyn Walker pointed to Inland Revenue guidance that said people would typically have received advice about the amount that was past due and a warning letter.
That noted that, since its system upgrade, Inland Revenue had more information from a wider variety of sources, which allowed it to be more proactive.
"Inland Revenue also did a systems upgrade [recently] so that the MyIR system more prominently shows any tax debt when people log in. I've heard some feedback that some people think it feels aggressive," she said.
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Even Australians get it - so why not Kiwis???
“Ten years ago, if a heatwave as intense as last week’s record-breaker had hit the east coast, Australia’s power supply may well have buckled. But this time, the system largely operated as we needed, despite some outages.
On Australia’s main grid last quarter, renewables and energy storage contributed more than 50% of supplied electricity for the first time, while wholesale power prices were more than 40% lower than a year earlier.
[…] shifting demand from gas and coal for power and petrol for cars is likely to deliver significantly lower energy bills for households.
Last quarter, wind generation was up almost 30%, grid solar 15% and grid-scale batteries almost tripled their output. Gas generation fell 27% to its lowest level for a quarter century, while coal fell 4.6% to its lowest quarterly level ever.
Gas has long been the most expensive way to produce power. Gas peaking plants tend to fire up only when supply struggles to meet demand and power prices soar. Less demand for gas has flowed through to lower wholesale prices.”
Full article: www.theguardian.com...
If even Australians see the benefit of solar - then why is NZ actively boycotting solar uptake? The increased line rental for electricity was done to make solar less competitive and prevent cost per kWh to rise even more than it did - and electricity costs are expected to rise even more. Especially as National favours gas - which is the most expensive form of generating electricity. Which in turn will accelerate Climate Change, as if New Zealand didn’t have enough problems with droughts, floods, slips, etc. already.
Time to Tickle Your Thinker 🧠
If a zookeeper had 100 pairs of animals in her zoo, and two pairs of babies are born for each one of the original animals, then (sadly) 23 animals don’t survive, how many animals do you have left in total?
Do you think you know the answer? Simply 'Like' this post and we'll post the answer in the comments below at 2pm on the day!
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Poll: As a customer, what do you think about automation?
The Press investigates the growing reliance on your unpaid labour.
Automation (or the “unpaid shift”) is often described as efficient ... but it tends to benefit employers more than consumers.
We want to know: What do you think about automation?
Are you for, or against?
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9.5% For. Self-service is less frustrating and convenient.
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43.3% I want to be able to choose.
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47.2% Against. I want to deal with people.
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