Your Guide to New Zealand Tax Refunds
If you think you could be owed a tax refund, now is the time to see if you are eligible. The excitement of getting an average tax refund of $450, seems to render lots of taxpayers void of the common sense usually used when considering finances. So where do you stand when it comes to the common question; Use a third party tax agent or muster the strength to face IRD and do it yourself?
It can become a nightmare if you’re a tax payer that owes tax bills, but most of us will receive a tax refund within 3 months of applying. So are you willing to justify paying up to 30% of the refund to a third party tax agent?
The problem is, most of us disregard tax refund as free money at the end of the tax year, instead of considering it the same as any hard-earned wage, like it is! So most of us don’t care about handing over just under a third of our refund (excluding GST), so they don’t have to do it themselves. What’s the big deal about going through the IRD anyway?
There is a common view among New Zealanders’ of dealing with IRD as being a tedious, challenging and time-consuming experience. Basically most of us would rather pay someone else to do it for us so we can avoid dealing with IRD as we don’t believe we have the patience.
In reality, both options have a simple online process. The only difference in using IRD is that you have to call them to activate your online account if it’s your first time registering. Not too big of a deal considering how much money you’re saving.
The benefit the third party tax agents seem to advertise hugely, is the fact your personal tax summary isn’t submitted to IRD if you do in fact owe. It might seem hugely advantageous not to be liable for owed tax bills, but you can also avoid liability through IRD’s website. In fact, the IRD website even advises you not to worry, better luck next time. The only downfall of using IRD’s online service is, despite the questions being relatively simple, mistakes such as misunderstanding something, could cost you some of your refund.
Over time, third party tax agents have improved their terms and conditions, but were once notorious for providing misleading information regarding service costs, and ongoing contractual relationships. This caused a few companies to come under scrutiny of the Commerce Commission, for failing to meet certain obligations of the Fair Trading Act. Although this has improved dramatically in past years, it’s very important you read and understand all the sneaky fine print.
Ultimately, your decision on whether to use a third party tax agent or do it yourself is simply a matter of convenience and choice. The most important thing to worry about is that you familiarise yourself with the terms and conditions, and make an effort to understand the tricky jargon before you sign the dotted line. Make sure you’re happy with the deal you’re getting and then your only concern is what to do with the money!