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Making Tax Easier

As you may be aware the Government is consulting on a range of proposals for improving the way Inland Revenue interacts with tax payers in the future. You can find out more about these proposals and tell IRD what you think at http://ird.govt.nz/makingtaxeasier.

Among the key proposals for employers and businesses are –

  • Software that takes care of routine processes. For example, PAYE compliance tasks such as the need to separately file an employer monthly schedule could be managed by software that automatically communicates with Inland Revenue. The software would have an option of providing information to Inland Revenue every pay-day.

The current situation for employers is that they can file the EMS on-line using the Inland Revenue’s ir-File service. This facility is a great improvement on the paper-based filing method but can still be a barrier to small business owners using payroll software systems. Our on-line payroll application¬†FlexiTime provides a simple file download that creates a file on the users computer which can then be uploaded to ir-File.

In contrast FlexiTime also uploads accounts payable invoices to on-line accounting app Xero automatically. The user doesn’t need to have any understanding of downloading and uploading files and they don’t need to log into different systems to achieve this. The magic in the middle is called an Application Programming Interface (API). FlexiTime communicates with Xero in a completely secure manner.

Inland Revenue’s proposal to develop an API for filing payroll related tax information is strongly supported by FlexiTime. We think, in fact, that it’s long overdue.

The Government’s current approach to making life easier for small business is to provide a subsidy of $2 per employee per pay for up to 5 employees. The subsidy is paid to Payroll Intermediaries, ¬†payroll companies that handle the uploading of the EMS file on your behalf.

It doesn’t make sense to have a subsidy paid by tax payers to large companies for basically doing highly manual task that could be done automatically using an Application Programming Interface.¬† FlexiTime thinks that this subsidy should be abolished and the savings invested into the development of modern interfaces with taxation systems.

Robert Owen
FlexiTime CEO.

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