As most TTR’s and COE’s will have expired on 31 March 2021, after 1 April 2021 anyone engaging a contractor (including another contractor) to undertake cultivation contract work needs to review their contractor file and likely get an updated IR330C or COE. You can find the IR330C form here.
The options available are:
The requirements for schedular tax, COE’s and TTR’s are the same even if the parties are related/associated entities.
When engaging a new contractor, or renewing their status, it’s essential that you confirm the person you’re dealing with is authorised to act, i.e. director of the entity or authorised by the owner.
More information on schedular tax reminders here.
An example of schedular tax deduction here.
If you pay a contractor for work, you must deduct tax from their pay and pass that on to IRD unless they have a Certificate of Exemption. IRD have advised that they are focussing on the kiwifruit industry and that means they will be checking contractors and growers to make sure everyone is doing it right.
Growers must sight an original of the Certificate of Exemption and must ensure it is valid. Certificates generally will be renewed annually. If a valid Certificate of Exemption is not sighted, then the grower must deduct withholding tax and pay that to the IRD via an Employer Monthly Schedule. NZKGI will be providing more information in coming newsletters and on our website and you can find out more at www.ird.govt.nz/contractors.
IRD have noticed that tax invoices from contractors are being incorrectly written up and growers are missing out. Some invoices received from contractors are deducting withholding tax before GST is applied which is incorrect and if not picked up by the orchardist results in a short-claiming of the GST input. Correct invoices should show the scheduler tax deduction being made after the GST is added. An example of the correct way to do this can be found here. more at www.ird.govt.nz/contractors. Please note that if your Contractor holds a Certificate of Exemption you are not required to deduct withholding tax (see here for further information).
Payday filing became mandatory on 1 April, which means all employers must now be payday filing.
This means that you:
Remember, payment due dates stay the same.
IRD’s latest webinar aims to answer all of your key questions about payday filing. You can watch this on demand here.
For more information on payday filing, visit IRD’s website.