CHANGES
TO LATE FILING PENALTIES FROM 1 APRIL 2002
Legislative
amendments have been made to Section 139B of the Tax Administration Act 1994.
The new rules for penalties and instalment arrangements will apply from 1
April 2002. The aim is to reduce penalties imposed on taxpayers
who pay just a few days late.
The
key changes are:
 |
staggered
application of the initial late payment penalty- an initial
1% late penalty will be charged on the day after the due date.
Any amount of unpaid tax (including penalties) outstanding at the
end of the seventh day from the due date will be charged a further 4%
initial penalty.
|
no
incremental late payment penalties on debt under an instalment
arrangement- the 1% incremental late payment penalty will not be
imposed if the taxpayer has met their monthly obligations.
|
|
The
staggered application of the initial late payment penalty will apply to
clients who have taxes due to be paid on or after 1 April 2002, in particular:
|
Income
Tax returns for 31 March 2001, due for payment on 7 April 2002
|
GST
returns for 31 March 2002, due for payment on 30 April 2002
|
PAYE
returns for 31 March 2002, due for payment on 5 April 2002 for large
employers and 22 April 2002 for small employers.
|
| |
The
non-application of incremental late filing penalties will apply to all
arrangements entered into or after 1 April 2002. The authority to
cancel late payment penalties under section 183B of the Tax Administration Act
1994 will also be repealed from 1 April 2002.
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