Recent media publications – Direct Credit of Tax Refunds from Inland Revenue
Take care when providing the IRD with your bank account details! If for any reason your bank arrangements change in the future, your details will need to be updated with the IRD. There have recently been situations where tax credits are released in error to the wrong bank account and there has been a struggle for the taxpayer to have these returned. IRD are encouraging all tax payers to have their bank account details lodged and eventually we will have no option here!
Recent media publications suggest there have been frustrations around taxpayer refunds being credited to incorrect bank accounts. This was focused on tax agents (not members of the Chartered Accountants Australia and New Zealand) having client refunds credited directly into their practice Trust Accounts, it does highlight how easy it is to have incorrect bank account details recorded with the IRD and the hassle of trying to recover those funds once problems come to light.
Inland Revenue have recently changed legislation to make it compulsory to provide GST refunds by direct credit unless taxpayer bank accounts are not held or there are extenuating circumstances. The bank account held must be the bank account of the correct entity that is entitled to the refund. If your situation changes in the future, the bank account details must be updated by you. Examples might be a change in banks, a relationship breakdown or change in business personnel. There is also the risk of business fraud if an employee enters their personal bank account details in a company tax account.
You can check the bank account details held at the IRD by logging into myIR Online Services, or alternatively we can assist you.