Channels for error correction Inland Revenue advises in the “Employer’s Guide” that errors must be corrected by phoning the department (for a small number of errors) or by completing a form that requires the figures originally sent in and what these should be changed to – in this document this process is referred to as “amending the original return”. Payroll intermediaries currently have access to an automated adjustment process. It was proposed that Inland Revenue should accept: error correction returns generated by employer’s payroll software; an employer ‘self-correcting’ the return they have filed through Inland Revenue’s secure on-line portal (myIR); paper error correction returns; and for small numbers of errors the correction could be advised by telephone. Submitters supported the proposed options. One payroll provider expressed concern about the prospect of an employer who uses payroll software errors through myIR. “Building an automated error correction process into payroll software for minor errors, or errors detected within the next few pay cycles is sensible.” (Interest group) “It is especially pleasing to see that there is flexibility in the proposals to allow employers to adjust errors in the manner that works best for their business / systems (and where possible have this as an automated process).” (Interest group) Self–correction through myIR: “I support this, especially for those submitting by manually entering the information via myIR and sending to IR. I have some concerns if manual corrections are made to returns submitted from payroll software. This is likely to result in inconsistencies between the payroll system and the information held by IR. I’d prefer that a return submitted from payroll software was unable to be amended in myIR with any corrections done within the software and submitted to IR as a separate pay return.” (Software provider) Reporting errors Reporting errors occur when what was paid to and withheld from an employee is incorrectly reported to Inland Revenue. Reporting errors should be corrected by amending the original return. This proposal continues current practice. Submitters who responded universally supported the proposed approach. “We support the solutions in the in relation to reporting errors.” (Accounting firm) “Ideally this should never happen with payroll software. If it does it implies there is a bug in the software.” (Software provider) correcting
Employer superannuation contribution tax (ESCT) Information about the amount of ESCT paid by the employer is currently provided at an aggregate level which shows the total paid by the employer for the month. Aggregate reporting complicates correction and precludes Inland Revenue from proactively refunding ESCT for example, when an employee opts out of KiwiSaver. Inland Revenue should obtain ESCT information at an individual employee Employers, accounting and payroll software providers supported this proposal. One submitter expressed the view that it should only occur if Inland Revenue uses the data to refund ESCT when employees opt out. “Fully support this and it will aid reconciliation.” (Software provider) “We strongly support the proposal that ESCT reporting is done at employee level.” (Accounting firm) “Yes please. Very much in favour of this. It is always calculated on a per employee per pay basis any way.” (Software provider) “If an employee opts out the KiwiSaver contributions are refunded but as the IRD do not have ESCT details at an individual employee level, they do not refund ESCT unless specifically requested. It would be useful if this problem is rectified as part of this proposal”. (Interest group)