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Mhk Chartered Accountants Comment On Gst Filing From Xero & Myob

Tuesday 14 June 2016, 3:58PM

By Beckie Wright

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IRD have confirmed that GST filing from software is “tried, tested and ready to use”. IRD state in a recent Business Tax Update “We're making things better for business by allowing customers to file GST returns directly from software. We've been piloting the new service with a group of Xero and MYOB customers, saving them time and effort. Customer feedback shows the new service is easy to use, convenient and provides more accurate data which is pre-populated from their sale and purchase figures. Xero and MYOB will offer this service to all their customers who file GST returns. Other software providers can also offer this service to their clients when they've met our criteria”, IRD state.

Ian Malcolm, Managing Director of MHK Chartered Accountants, loves and supports this initiative, albeit with a number of cautions. He points out that this does indeed make filing of GST returns easier.  Mr Malcolm comments that, “However, in real life, we know from the thousands of GST returns we’re involved with while preparing annual accounts and tax returns, it’s extremely rare that every GST return filed during the year is 100% accurate.  There are common errors such as incorrectly claiming GST on personal items such as life insurance payments, others incorrectly pay GST on GST refunds! Inevitably, there are adjustments made that are required to be processed in future GST returns.”

Mr Malcolm continues: “How will Xero and MYOB treat these?  Will they be sent as separate items, which could trigger a manual intervention and a potential GST query or even an audit by the IRD?   There are instances where minor amounts are simply included as Income or Expenses in the next GST return, as allowed for in the legislation, instead of being highlighted as a prior period adjustment.  In other instances, proactive voluntary disclosure is preferable by way of separate communication to the IRD, instead of a computer system sending notice of a prior period adjustment without accompanying explanation.

“This service can be used to file GST returns, or combined GST and provisional tax returns. If you use the ratio option to calculate your provisional tax you'll need to continue filing your GST return in myIR. If a business uses a tax agent and want them to file through software on the business’s behalf, the business will need to provide them with access to the software, which is easy to do with on-line software.  You'll also need to give your tax agent delegated access in your myIR account to file your GST return.”

IRD have created a Learn how to register for myIR and file GST online video to assist businesses use this feature.  It does pay to talk to your accountant about this process, so you are all working together to make this work without hiccups.

MHK Chartered Accountants specialise in legally minimising all types of taxation obligations and offer a no-obligation discussion free of charge.  For more information on this, and MHK Chartered Accountants, please go to http://www.aucklandaccountant.net.nz  .