IR10 Due Date and Late Filing Penalties: A Guide for NZ Businesses

As the financial year wraps up, tax time looms for New Zealand businesses. For those running companies, trusts, or partnerships, the IR10 form is a critical part of your compliance obligations. This guide explains what the IR10 is, its crucial due dates, and the penalties for filing late.

What is an IR10 Form?

The IR10 is not your main tax return. Instead, it is the Summary of Financial Statements that must accompany your primary income tax return. It provides the Inland Revenue Department (IRD) with a standardized overview of your financial health, pulling key figures from your full financial statements, such as your profit and loss statement and balance sheet.

You are required to prepare and file an IR10 if you file any of the following returns:

• IR4 - Company Income Tax Return
• IR6 - Trusts or Estates Income Tax Return
• IR7 - Partnership Income Tax Return
• IR8 - Māori Authorities Income Tax Return
• IR9 - Clubs or Societies Income Tax Return

This summary allows the IRD to process your financial information consistently and efficiently without needing to navigate the unique formatting of every business's accounting reports.

IR10 Filing Due Dates

The rule is simple: the IR10 is due at the same time as the main tax return it supports. However, the specific date depends on your business's balance date and whether you use a tax agent.

Filing Without a Tax Professional

For most businesses with a standard balance date of March 31st, your income tax return and the accompanying IR10 are due by July 7th of the same year. This gives you just over three months to finalize your accounts and file.

Filing With a Tax Professional

Engaging a tax agent or accountant provides a significant advantage: an automatic Extension of Time (EOT). With an EOT, the filing deadline for a March 31st balance date is pushed to March 31st of the following year. This gives you and your advisor a full year to prepare and file your returns accurately.

Non-Standard Balance Dates

If your business uses a balance date other than March 31st, your filing deadline is typically the 7th day of the fourth month after your financial year ends. A tax agent can usually secure an EOT for these dates as well.

Consequences of Filing Late

Missing the IR10 deadline means you have also missed your main return deadline, as the IRD views them as a single filing obligation. This can trigger several penalties and unwanted consequences.

Late Filing Penalties

The IRD charges penalties based on your net income. The penalty structure is as follows:

• $50 if your net income is less than $100,000
• $250 if your net income is between $100,000 and $1 million
• $500 if your net income is over $1 million

While these amounts may seem small, they are avoidable and can lead to further issues.

Loss of Extension of Time (EOT)

If you have a tax agent and file late, the IRD can revoke your EOT for the following tax year. This means your next return would be due by the earlier July 7th deadline, putting significant pressure on you and your accountant and disrupting your compliance schedule.

Interest on Use of Money (UOMI)

While not a direct penalty for late filing, UOMI is closely related. If you file late, you have likely also paid your tax late. The IRD charges UOMI on any underpaid tax. These interest charges are updated periodically and can add up quickly, especially on a large tax bill.

Increased IRD Scrutiny

A one-off late filing might be overlooked, but a consistent pattern of delays signals poor financial controls to the IRD. This can increase your risk of being selected for a review or audit, which can be a time-consuming and stressful process.

Ultimately, the IR10 is a key legal obligation. Maintaining good records throughout the year and communicating with your accountant well ahead of deadlines are the best ways to ensure you file correctly, on time, and avoid unnecessary penalties.