Prepare income tax payment notices

Modified on Fri, 27 Jun at 12:52 PM

Overview

Payment tasks in TaxLab act as reminders to check and send tax payment notices for entities in an organisation. Use payment tasks to view and update provisional tax calculations and payment amounts. Payment tasks integrate data from Inland Revenue and tax pools to help with calculating payment amounts. Tax notices can be sent directly from TaxLab to end users via email, or downloaded as PDFs.

Open a payment task

From the TaxLab home screen, in the navigation bar select Workflow > Payments.
Select the relevant due date. Past due dates are shown in red.
Select from:
- the name of the group
- Not Grouped or
- All Payments.
This opens the payment tasks overview screen for that date, for the view selected.
Select a task to open it in a new tab.

The left hand panel displays any tax transactions in the related tax year that have been retrieved from integrations with Tax Traders or TMNZ tax pools, or from the Inland Revenue integration, as well as transactions that have been added manually. These transactions impact the remaining amounts to pay, which are calculated in the right hand panels.

The right hand panels are separated into 4 components: the payment calculation, the instalment amount to pay, the task status, and the notes and files.

Calculating residual income tax

The calculation panel looks at the provisional tax method the entity is using, assessments for the previous 2 tax years from Inland Revenue retrieved via the integration (if enabled), and residual income tax balances in previously filed tax returns in the software. If the entity is on standard uplift, current year payments will be calculated on figures in the software.

The Forecast section calculates the forecast taxable income and residual income tax if the entity is using standard uplift or if an amount has been manually typed into the Forecast field.

First year calculations

If there is no residual income tax figure available, either because this is the first year that an income tax return is being prepared in TaxLab, and/or data from an Inland Revenue integration is not available, add the prior year residual income tax amount manually:

From within the payment task, in the left hand panel select New > Inland Revenue
Edit the date and year to the prior year
Under Transaction select Return debit
Enter the amount as a debit (positive)
Enter any optional Notes
Select Save.

Add an estimate

If the entity uses the estimation method to calculate provisional tax, you will need to enter the estimated residual income tax for the current tax year to the software, so that provisional payments can be calculated.

From within the payment task, in the left hand panel select New > Estimate
Edit the date and year to the current year
Transaction will default to Provisional Assessment
Enter the amount as a debit (positive)
Enter any optional Notes
Select Save.

The thumbs up / thumbs down icon

Next to some transactions on the tax payments overview screen, there may appear a thumbs up or thumbs down icon. The software compares the calculated residual income tax (if the entity is on uplift), with the draft position of the prior year’s return currently being prepared. If the draft position will result in a lower provisional tax obligation, a thumbs-down icon is displayed.

Calculating instalments

The second panel takes the residual income tax calculated above, and calculates the amount due by each instalment. Any credits from the tax payments panel are displayed and deducted to give a net balance due by the payment date.

Task progress, contacts and templates

The third panel displays the Progress of the task. This is updated manually by the user, unless the send by email function has been enabled for the organisation. If a task has been marked as sent, it will display as Completed on the tax payments overview screen.

Assigned to displays which user has been assigned the task. If the task has been completed (sent) it will no longer be able to be reassigned.

Contact Name and Email display the details of the entity's contact. The payment notice will be addressed to the Contact Name, and if send by email is enabled, will be sent to that email address.

Theme, Office and Template show the format of the notice sent to the entity. When a notice is selected for printing or emailing these can be changed. The default Theme and Office are TaxLab, and the format of these can be customised for an organisation during organisation setup. Template options are:

Inland Revenue: used for a single entity, and shows the amount due.
Tax Traders: used for a single entity using tax pooling provided by Tax Traders to pay or finance provisional tax.
Inland Revenue detailed: used for a single entity showing the detailed calculation to arrive at the provisional tax liability.
Inland Revenue Group (short form and detailed): used for a group of entities.

Tax notices also differ by each of the following types (which can be customised also at organisation setup):

Provisional tax templates
Final provisional tax templates
Terminal tax templates

Selecting Open opens the filing and payment schedule for that tax year for the entity.

Notes, files and emails

The Note section allows users to add any comments to the payment task. Any notes added to a task will make the note icon blue on the tax payments overview screen. The Files tab enables files to be uploaded to the payment task. Email history is available for organisations with send by email enabled, and will display a log of all emails sent, by user, to contact, and when.

Tax pooling

The final section displays the total payment due for the tax payment, and calculates the fee that would be payable to the tax pool if the tax was financed, based on the entered Maturity Date.