Date posted: 2/05/2018 5 min read

Inland Revenue calls on CAs for help

Five chartered accountants are helping to make New Zealand’s Inland Revenue Department (IRD) new online platform user-friendly for tax agents.

In Brief

  • The next phase of the transformation project starts on 17 April 2018 when more tax products are moved to the new system, such as fringe benefit tax.
  • The GST rollout of Inland Revenue’s new digital platform caused problems for tax agents.
  • The IRD seconded five CAs to offer their advice on how to improve it and future rollouts and will consult more closely in future.

New Zealand Inland Revenue’s Business Transformation Program has recruited a group of chartered accountants to help make its new digital platform more user-friendly for tax agents.

The four-stage, three-year program is New Zealand’s largest and costliest government project, with a price tag of about NZ$1.7 billion. It includes a major upgrade of IT systems, and changes the way the Inland Revenue Department (IRD) collects tax.

February 2017’s first rollout moved GST into myIR Secure Online Services and showed up significant teething problems. It inspired the department to second five chartered accountants to offer their feedback to improve the system and make future rollouts more effective.

CA feedback

Craig Savage CA jumped at the chance to be involved, knowing how the platform worked would affect his day-to-day life for the rest of his career. “The first part of the rollout had some issues, so I was quite keen, being a fairly vocal kind of chap, to help resolve them.”  

Before the GST rollout occurred, he says, the IRD could have communicated with the accounting profession better, particularly about the new conceptual changes. “We knew on the day that it went live it was all going to be a bit new, but the main guide came out a month later.”  

The modernised platform included a new concept called “workspace”, says Savage. “But rather than being able to automatically see a client’s information on it, I would have to add them one by one. The IRD assumed we would bring across just the ones we file the GST for, but the reality is I have 500 clients who could ring me at any time with a question.”

The main benefits of bringing in the tax agents are having their knowledge and experience on tap and seeking their advice in real time
Greg James Inland Revenue’s Deputy Commissioner

He says there were also issues around how the IRD communicates its changes to taxpayers and their accountants. “For example, they would send thousands of notifications informing people their GST date was coming up, which would be useful for an individual business owner, but we’d get 400 letters saying the same thing. And one of those letters would be totally different and relevant but not easy to spot in the avalanche of mail. It just wasn’t manageable.”

Savage was not alone in wanting to share his views. Greg James, Inland Revenue’s Deputy Commissioner, Transformation, says customers were very vocal when IRD brought GST onto the new system. That prompted IRD to ramp up its user testing before the release of the second phase in April this year.

“That feedback has been immensely valuable and through that we found some aspects of the new system were causing some extra work and some frustration. People were finding it difficult working across the new and the old systems, especially when their clients’ situations were more complicated.”  

The department set up focus groups, hosted tax agents in user labs, and seconded the five CAs to offer advice and feedback. James maintains that the IRD has always communicated regularly with tax agents. “The feedback loop has always been in place, but this is the first time we have actually seconded working tax agents into our transformation program.” And, he says, the secondees are having a real impact.

Related: The NZ Tax Roadshow

Get to grips with the latest business tax changes delivered by our CA ANZ Leadership & Advocacy tax team at a location near you. Hurry, places are filling fast. 

Real-time benefits

“The main benefits of bringing in the tax agents are having their knowledge and experience on tap, and seeking their advice in real time.” He says the developers are closely tracking the secondees as they move through the new system to make sure the design matches their practices.  

EY’s Xavier Watts, who has also been seconded, says they have been providing feedback on the new platform, testing for the release coming up in April, and planning for next year’s big release, when income tax will move to the new platform. “There are also a variety of other projects going on here that I’ve been able to provide input to – so I’ve been working with several different teams on a range of issues.”

Savage says the CAs have been involved in the look and feel of the next rollout. “Often we get involved when it’s ready for testing and so before they go out to wider groups, we will have a look at it and if we say it has problems, they will go back to the drawing board.”  

Savage says he was surprised at how little the IRD knew about how accountants operate, “so where change is being made in the future they have a better understanding of how that will affect firms actually out there doing things”.  

Savage agrees that the old system was starting to creak at the seams, and he finds the new system far easier to use. “And there are plans afoot that the system will be a lot more open to receiving information from other software, such as Xero, which will certainly streamline processes.”

After his experience, Watts believes more consultation is an obvious step that Inland Revenue could take to avoid unnecessary future strife. “Being willing to listen is good, but it’s also better if consultation takes place when changes are still realistically possible.”  

Savage and Watts believe the IRD has a largely positive relationship with the accounting profession. “The February rollout wasn’t great and we were pretty angry about it, because at the end of the day, we don’t have a choice,” says Savage. “We have to deal with the IRD in whatever format they say.” But he says the enhancements “really solved some problems and showed people the IRD was listening”.  

Watts says because accountants and the IRD are “reasonably interdependent”, they both have an interest in the system working effectively. “If Inland Revenue doesn’t appear to listen, or carries on its way regardless of feedback, then things may not improve much. However, if Inland Revenue genuinely takes on board feedback from the profession, the relationship should improve.”

Staff cuts

Savage is less enthusiastic about the proposed IRD staff cuts, however, with the workforce expected to be reduced by 30% by 2021. “It is often the human touch that sorts things out. I’m all for getting the routine stuff done online, but sometimes ringing up is the best way to sort things out.”   

James concedes the IRD has learned lots of lessons from this secondment process. “It’s worked well, so I’m sure we’ll keep doing it and keep getting better.”   

He says the department has a very positive and constructive relationship with tax agents. “We all have the same goal of trying to make tax simpler for our customers and making it easy for them to meet their obligations. Long may that continue.”

The next phase of the transformation project starts on 17 April 2018 when more tax products are moved to the new system, such as employer monthly schedules, fringe benefit tax, and withholding tax.

Related: Trust vital in NZ tax transformation

A CA ANZ–TMNZ survey shows tax agents and businesses are nervous about sharing information with Inland Revenue.

Alexandra Johnson is a journalist based in Wellington.

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