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What Happens If I Forget To File For Tax

Categories   News & Updates

If we’re making a list of pleasurable things to do, filing a tax return will rank somewhere near the end. It is tedious, which is why so many people don’t bother.

However, there is at least one good reason to make an effort – they may owe you money! Here’s a guide on how to get it back, even if you missed filing your return.

Do You Need To File A Tax Return?

Most people who earn a wage don’t need to file a tax return. This is because the IRD assumes that someone who earns a wage, earns no other income, and has selected the right tax code will have paid the correct amount of tax.

However, there are exceptions.

You’ll need to file an IR3 individual income tax return if any of these conditions apply to you:

  • You received income with no tax deducted.
  • You received schedular payments (formerly withholding payments).
  • You received income from an estate and/or trust.
  • You received shares from your employer for less than market value.
  • You were assessed for provisional tax.
  • You received overseas income which must be accounted for in New Zealand.
  • You have a loss to bring forward.
  • You have excess imputation credits to bring forward.
  • Your balance date changed.

You’ll also need to file a return if you received a personal tax summary, otherwise known as a PTS. You’ll typically receive a PTS if you have a student loan, you’ve received Working For Families tax credits or you’ve used a special or incorrect tax code. There is more information on PTS returns on the IRD site.

I Should Have Filed A Return, But I Didn’t. What Now? 

If you do have to file a return you need to do so by the due dates. IR3 returns are typically due by 7th of July unless you have a tax agent or extension of time. We may be able to get a time extension for you.

If you don’t file a required return in time, you may have to pay a late filing penalty. Interest may also be charged, which can quickly mount up, so it pays to get onto overdue returns as soon as possible.

Steps you should take:

  • The IRD may have already sent you a default assessment of how much they believe you owe. Check to see if you’ve received one and follow the instructions provided.
  • File your overdue personal tax return to see if you owe money or are due a refund.
  • Send your payment or request a refund for any outstanding taxes.

If you have any concerns, get in touch with MyTax. You may go from having tax worries to receiving a refund cheque!

If you do have to pay, there are a range of payment options open to you, including full payment, an installment plan, or the IRD may determine that you suffer undue hardship and write-off some or all of the amount owed. Once again, acting promptly is important. If you’ve received a payment demand from the IRD and you feel that you are unable to pay the amount in full, then you should give the IRD a call on 0800 227 771, sooner rather than later.

There is another reason for acting quickly – a grace period may apply.

The IRD have some discretion if this is the first late payment in a two-year period. In this case, a warning letter will be sent out advising that payment has not been made and giving a new due date. If payment is made by this new date, then no late payment penalty will apply.
However, if payment is not made, late payment penalties will be added from the original due date. If you’ve entered into an installment arrangement before the due date of the tax, the grace period will not be applied, allowing it to be used at a later date, if you need it.

You Can Claim For Up To Five Years

Perhaps you didn’t need to file a return, and you haven’t received any demands from the IRD, but suspect you might have paid too much tax. If the year passes, is it too late to claim for the previous year?

Absolutely not!

Many people are unaware of this fact, but you can claim for the previous five years. But be quick!  At the time of writing, the 2018 financial year has not yet ended, so you can still claim for any overpayments owed from 2013-2017, but you need to claim by the 31st of March. Once the new financial year begins, then the 2013 tax year is locked.
Unfortunately, the New Zealand tax legislation won’t allow you to request any refunds that are older than five years. So get in early!

How Does A Tax Refund Work?

You could do it all yourself or leave the hassle to us.

If you want us to see if you qualify for a tax refund – for the past five years – here’s how the process works.

First, you submit an application. This takes around five minutes. You will need to have your IRD number, driver’s licence and bank account number handy, along with some details regarding your income and work.
Once we have your details, we run all the numbers for the past five years. We can quickly calculate whether you have any tax refunds owed.
If we find that you don’t have a refund owing, and instead you owe the IRD tax, we will stop the process so you can be sure they won’t hear from us. You won’t be charged any fee, so there is no cost to you!

If we find the IRD owes you money, we will prepare and file your tax returns on your behalf, and only for the years in which you’re owed money.

After processing, the IRD pay your refund into our trust account. We do all the paperwork and will send your refund by cheque or direct credit to your bank account, less our fee. You can also collect Fly Buys points on your fee.

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