Tax practitioners say it takes longer to get a response from Inland Revenue Department (IRD), but they find that tax officials are helpful and demonstrate a good understanding of client issues, according to the 2023 Inland Revenue Satisfaction Survey.
The annual survey is conducted jointly by CA ANZ and Tax Management New Zealand (TMNZ) to provide an insight into what tax practitioners think of the way in which IRD administers the tax system.
IRD service delays
A key finding is that it is taking tax officials longer to respond to queries, impacting accountants’ workflow and causing a delay in resolving tax problems for clients.
More than half (52%) of survey respondents said it was taking six or more days to hear back from IRD, whereas last year only 35% of respondents were experiencing the same delays.Click image to enlarge. Graph: Response time. Source: Inland Revenue Satisfaction Survey 2023, CA ANZ and Tax Management New Zealand.
TMNZ chief executive officer Chris Cunniffe FCA says the response time has blown out significantly between surveys and that is due to IRD’s inability to respond more quickly to tax agents using digital channels.
“Some of the strong feedback that comes out from the survey is that the time taken through webmail and myIR is too long,” Cunniffe says. “The survey shows a significant increase in agents’ use of digital channels, but there is a quid pro quo. There are times when you need an answer right now and Inland Revenue is not delivering timeliness through those digital channels.”
Pictured: Chris Cunniffe FCA, TMNZ
“Agents are happy to move to digital channels, but there is a quid pro quo. There are times when you need an answer right now and Inland Revenue is not delivering timeliness through those digital channels.”
Most popular channels
CA ANZ’s New Zealand tax leader, John Cuthbertson FCA, says that the myIR online service is the channel most used by tax agents, with 93% of respondents stating they used the online portal.
“This is a win for Inland Revenue’s digital strategy,” he says, “but they are at risk of snatching defeat from the jaws of victory. It has become a serious choke point for communications. The slow responses – and insistence on using already-overloaded digital channels for follow-up detail – is a source of frustration for our members, compromising their ability to work efficiently when preparing tax returns. A review of process design would greatly assist.”
Cuthbertson also notes there was an increase in the numbers of tax agents using the IRD phone service compared with previous periods, with 52% of respondents stating they used the phone line to get queries answered.
“The phone is obviously the backstop measure when other things aren’t working, to try and get something done,” Cuthbertson says. “For some tax agents who just want to get an answer quickly, the preferred option is still the phone service.”
Pictured: John Cuthbertson FCA, CA ANZ
“Slow responses – and the insistence on using already-overloaded digital channels for follow-up detail – is a source of frustration for our members, compromising their ability to work efficiently when preparing tax returns.”
Helpful and knowledgeable
The survey also found, however, that once agents contact a tax official, they are more satisfied: with 67% of respondents rating the tax authority as being good or excellent on helpfulness. This is a massive 11 percentage point increase from last year.Click image to enlarge. Graph: Ratings of various factors in their engagement with Inland Revenue. Source: Inland Revenue Satisfaction Survey 2023, CA ANZ and Tax Management New Zealand.
Almost 60% of respondents said that the person from IRD who they communicated with understood the issue being discussed and 52% of respondents said IRD was consistent in its responses, when they finally got through.
Compliance proves costly
The survey also revealed that compliance issues have posed concerns for tax agents this year. There has been an increase in compliance costs related to financial reporting and disclosure requirements for trusts, with 99% of survey respondents noting costs have risen since the new reporting requirements were introduced.
This year, 80% of survey respondents reported compliance costs of up to NZ$1000 to meet IRD’s reporting requirements. What annoys agents is that they believe much of the information has limited value to IRD.
Just over one-third of respondents said they did not find enough information and guidance for their clients seeking to comply with a complex trust disclosure regime, but Cuthbertson says that IRD has improved its guidance quality.
“They have done quite a good job of catching up and putting out useful guidance in layperson’s terms outlining what is required, and also producing some calculators and fact sheets,” Cuthbertson says.
“It is a very complex area, but two-thirds of our members are happy with the current guidance provided by Inland Revenue.Click image to enlarge. Graph: Average proportion of respondents trusts increasing by each cost band. Source: Inland Revenue Satisfaction Survey 2023, CA ANZ and Tax Management New Zealand.
Better instalment arrangements
The new, streamlined method for establishing instalment arrangements for clients struggling to pay their tax debts got a thumbs-up from members: with 70% of respondents said that setting up these arrangements is fairly simple to do.
Cunniffe says that the survey results also provided other pleasing feedback for the tax authorities – tax professionals believed their clients would be committed to repaying their debt within the timeframe agreed. In fact, 75% of respondents were highly confident their clients would comply with the arrangements made with the revenue authority.
“This is a great outcome for the system – in the past there had been real or perceived barriers to dealing with IRD on instalments,” Cunniffe says. “IRD was perceived to be inconsistent in its application of arrangements – a bit of luck as to who you dealt with. Removing this barrier gives agents confidence to proactively manage the client’s position and to get them back on track.Click image to enlarge. Graph: Ease of process of instalment arrangement. Source: Inland Revenue Satisfaction Survey 2023, CA ANZ and Tax Management New Zealand.Click image to enlarge. Graph: Meeting tax repayments. Source: Inland Revenue Satisfaction Survey 2023, CA ANZ and Tax Management New Zealand.
A two-way conversation with IRD
The views members express through the survey form an important component of advocacy for Cuthbertson and the CA ANZ tax team. Survey results are shared with the tax authority, so that they are aware of the key areas of concern – and areas of satisfaction – regarding IRD’s performance.
“This year, the survey results also confirmed anecdotal evidence from our members about issues with response times for secure webmail,” Cuthbertson adds. “We have reiterated this feedback to Inland Revenue, and stressed that more resourcing, better form design and other solutions may be required to address this choke point, and streamline collaboration between our members and Inland Revenue.”
How CA ANZ works with Inland Revenue
The CA ANZ tax team is in regular contact with Inland Revenue, speaking to its designated IRD external relations manager, scheduled fortnightly catchups with IRD policy, quarterly national tax liaison group meetings on operational matters, and technical liaison meetings with whole of IRD representation, Tax Advisory Group meetings with IR Policy and Treasury, as well as the commissioner and deputy commissioners. CA ANZ tax leader John Cuthbertson FCA says the team uses these opportunities to pass on member feedback and issues, and discuss solutions for the tax system as a whole, as part of its public-interest advocacy.
For CA ANZ support with IRD-related issues, email: [email protected]