This article was originally created for Hayes Knight (now Nexia Auckland).
Home > Updates > Paying IRD by cheque – The screws are tightened
There has been some reluctance for Government departments to be seen as the “first cab off the rank” in proceeding with this change. Recently however Kiwibank has announced it will be going cheque free from 28 February 2020. This new initiative by Kiwibank therefore effectively rubber stamps where the Inland Revenue is looking to go.
There are clearly a few reasons for Inland Revenue wanting to make the change. Firstly, year on year the volume of cheques being received is reducing dramatically. Secondly, as Inland Revenue moves to its new IT systems, it is an inefficient use of resources to continue to keep legacy systems operable, for the relatively small volume of cheques being received.
So what is changing? “Post-dated cheques” will no longer be accepted by Inland Revenue, effective from 1 February 2020. Ultimately however this is a short step towards the complete removal of this form of payment. Accordingly, from March 2020 Inland Revenue has also signalled cheques will no longer be accepted.
Anecdotally, the use of cheques for payment to the Inland Revenue is higher amongst rural businesses and also the elderly who may not have access to online banking (or indeed not have the ability to use online banking). Given these challenges, our banks, alongside Government departments, will need to work together to come up with a suitable workaround to assist these people.
Please therefore note the changes effective from 1 February 2020. If you have the ability to do online banking but have chosen not to use online banking, we would recommend you discuss your options with your bank.
Lastly, given likely changes in the future, you should continue to keep an eye out for any future communications from the Inland Revenue on this topic.
If you have any question regarding this, please contact one of the team at Hayes Knight.
