Interest Rates for Payments With IRD Are Changing
Inland Revenue have announced that they are changing the interest rates paid by and to taxpayers who either under or overpay their tax – of course the rate it pays is dropping by more than the rate it charges.
From 16th January, taxpayers who overpay their tax will be paid an interest rate of 4.3 percent, down from 4.67 percent.
While those who underpay their tax will be charged 10.88 percent, down from 10.91 percent previously. This is also charged when tax is not paid by the due date.
Evidently the rates are driven by formulas, with underpayments based around the Reserve Bank’s floating first mortgage rate for new customers in the house market, plus 2.5 percent. While overpayments rate is calculated on either 0 percent or the Reserve Banks 90-day bill rate minus 1 percent, whichever is higher.
We understand that no one likes paying tax, but I am sure we can all agree that no one wants to pay the government more money than necessary. This change is mostly going to affect those who underpay or bury their heads in the sand when it comes to taxes owing.
Key takeaway here is that if you’ve got a tax debt, don’t ignore it – talk to us (Sam, our tax manager) so we can help you come up with a plan or get a payment arrangement put in place to minimise additional tax payable.
From 16th January, taxpayers who overpay their tax will be paid an interest rate of 4.3 percent, down from 4.67 percent.
While those who underpay their tax will be charged 10.88 percent, down from 10.91 percent previously. This is also charged when tax is not paid by the due date.
Evidently the rates are driven by formulas, with underpayments based around the Reserve Bank’s floating first mortgage rate for new customers in the house market, plus 2.5 percent. While overpayments rate is calculated on either 0 percent or the Reserve Banks 90-day bill rate minus 1 percent, whichever is higher.
We understand that no one likes paying tax, but I am sure we can all agree that no one wants to pay the government more money than necessary. This change is mostly going to affect those who underpay or bury their heads in the sand when it comes to taxes owing.
Key takeaway here is that if you’ve got a tax debt, don’t ignore it – talk to us (Sam, our tax manager) so we can help you come up with a plan or get a payment arrangement put in place to minimise additional tax payable.
Other Bulletin Articles
