IRD Compliance: By the numbers
A few weeks back, we had a meeting with IRD. Usually, they trot out someone with some pre-rehearsed lines and the offer to jot down feedback we give them and ‘take it back’ to the office. But this time, we had someone from senior management, who shared a lot of data with us and some key areas of focus. Here were a few things that stuck out to us:
– For every $1 that IRD spends on chasing outstanding debt, it targets a $40 return, and it is presently getting a $63return. More than $4 million per week of overdue tax is being collected now
– For unfiled tax returns, IRD is currently getting a $45 return for each dollar spent ‘chasing’
– Between July and August, ¼ of all audits opened were about property related transactions
– Unannounced visits have been (re)commenced, targeting liquor stores and construction sites in the first instance
– There are currently 21 court cases regarding the Small Business Cashflow Loan Scheme, with 3 sentences handed down during July and August
So, after a quite spell, clearly IRD have really lit a fire under both investigations and collections. For quite some time, both of these activities have really been on the backburner, so there is quite the pile for them to get through!
If you have a knock on your door (or more likely, by mail), then contact us.
Better late than never
After what seems like an eternity, NZ banks are finally rolling out Payee Confirmation. Really simply, this means that when paying someone via internet banking, you will be able to check that the name on the account matches whoever you expect to be paying before sending the $$$.
Little ol’ NZ has been a real laggard here – other countries have had this feature for years, and in some nations, it has drastically reduced the instances of scams involving transfers to local bank accounts. You can read a bit more about it here.
We think that is about time that the banks stopped dragging their heels and put this in place, so are pleased that it’s arriving this month. But at the same time, we know that the various scams will evolve, and the scammers will switch to different tactics. So, if you are ever in doubt as to the legitimacy of any transaction, we encourage you to pause and check with someone you trust if you’re ever even the slightest bit suspicious.
Open Banking
Since we are on the subject, a slight rant. The above is as mall step in progress as NZ slowly lumbers in the general direction of open banking. If you’ve not heard of it, in over-simplified terms, open banking allows you to share your banking information with third parties.
We’re really keen to see open banking – while not without its pitfalls, overseas experience has shown that the benefits to outweigh the downsides. One of the main benefits is the ease of switching between banks, meaning that shifting a mortgage or business finance should be much quicker. But there should be a whole host of other benefits also. Here’s what Consumer thinks about it.
The Commerce Commission was fairly blunt in its assessment of our progress toward open banking, in its view, we’ve been too slow because the banks have been left to their own devices. As open banking brings with it greater competition between the banks, they aren’t exactly incentivised to race into it.
Despite the potential benefits, it looks like we are still away off seeing it in action, it looks like it will be a while yet before we see this upside. The big 4 Aussie banks won’t be ready to apply open banking to accounts until late next year and Kiwibank is a year behind that. But this rant might be a bit pointless as there really doesn’t seem much that we can do to speed the banks up around this!