How to lodge a late tax return

Have you missed one or several years of filing returns?

Paying taxes is inevitable and eventually missed taxes will catch up with you, whether you intentionally missed paying those taxes, or whether it was an accidental oversight. It is important know how to lodge a late tax return in the correct way. If you owe money to the Inland Revenue Department (IRD) New Zealand they will charge you for what they calculate you owe (sometimes called a default assessment) and add on penalty charges for late payments.

How to Lodge a Late Tax Return

The first step is to hire the services of a professional tax accountant. Gerard has extensive experience with tax returns and special situations, especially as he has worked for the IRD as well, and therefore has seen more of the workings of this department than the average tax accountant. Take all your tax information to Gerard and through his expertise he can find the optimal financial solution for you.

Voluntary Compliance and Late Filing Penalties

The system of taxation in New Zealand is based on voluntary compliance. This means it relies on its taxpayers meeting their IR obligations under the tax laws voluntarily. This is usually done by filing tax returns by the due date to the IRD. Any taxpayer not doing so can be liable for a penalties and interest. The penalty charge is imposed to promote voluntary compliance as well as to promote impartiality and consistency across the penalties imposed.

Late Filing Penalties for late tax returns in New Zealand

A taxpayer is liable to pay a late filing penalty if they do not complete and provide on time an annual tax return and any statements of payments and expenditure associated with that financial year’s income. If tax returns are not received the Commissioner can notifies the taxpayer that a penalty is due for payment. The penalties vary according to an individual’s annual net income. An annual net income below $100,000 is liable to a $50 penalty. Between $100,000 and $1,000,000 the penalty is $250, while an annual net income in excess of $1,000,000 is liable for a fine of $500. If the outstanding return is filed within a 30 day period of the penalty notice being imposed the penalty is rescinded.

Late with your taxes?

Call Gerard on 09 266 8379 for advice regarding filing tax returns!

Methods to Manage your Income Tax

There are systems in place to help you manage your income tax. One of these is provisional tax; you pay in instalments throughout the year in preference to paying a lump sum at the end of the financial year. If you had to pay over $2,500 tax in the previous tax year you are liable for paying provisional tax the following year. It is designed to be used by individuals, companies and trusts. Taxpayers on this scheme are usually those with a self-employed income, a rental income, an income earned as a contractor, an income from a partnership or anyone having an income earned overseas. With the assistance of a tax accountant work out your annual tax due using the accounting income method then pay the amount you are due to pay at the time it is due. As long as you pay the amount due and on time you will not be liable for a penalty. As long as you budget for your provisional tax, keep track of how much you need to pay and when and ultimately keep some money aside to pay before the due date arrives you should have no problems with this method of paying your tax bill. Following this method you will avoid problems when lodging late tax returns with the IRD!

Provisional Tax Instalment Payment Dates

The dates of your provisional tax payment depend upon the option you are using to calculate your provisional tax and when your tax year ends. For most people this date falls on March the 31st, the standard balance date. You will generally pay your provisional tax in three installments, 28th of August, the 15th of January and the 7th of May. If you are using the accounting income method you may pay by monthly installments. You will then need to make 12 annual payments due on the 28th of each month beginning on the 28th of May. The exception being there is no payment during December. January’s payment is made on the 15th and the final payment is made on the 7th of May. If the date of your balance being due is not the 31st of March all these dates will be different and you should check with your tax accountant for more information.

Call 09 266 8379 for an appointment and let us help you to get sorted with IRD and filing late tax returns!

Late payment penalties

You should ensure you always make your provisional tax payments on time as any late payments incur penalties from the IRD. These penalties are 1% of the amount outstanding for each day you are late paying. This rises to 4% if you are a week overdue with your payment and an additional 1% is added for each month the tax is unpaid.

Managing your Provisional Tax

You should learn how to manage your provisional tax or hand over your tax affairs to a tax accountant and all this will be done on your behalf. You should keep track of how much you need to pay and by what date, however, if you are using the accounting income method which became available from April 2018 and certain accounting software can do this for you.


Set sufficient money aside, the first instalment will be due shortly after you have filed your tax return. Open a separate bank account for your taxes. Make regular deposits so you are always in credit when payments are due to the IRD.

If things do not work out , contact us to discuss how to lodge a late tax return in the best possible way.