Anyone who is self-employed or earns business income is required to file an Individual income tax return (IR3) at the end of each financial year. The financial year finishes on the 31st of March each year. An IR3 can be downloaded from the IRD website, or completed online through a myIR Secure Online Services account. The due date for filing an income tax return is the 7th of July, unless you have a valid extension or a tax agent who is exempt from this. In order to make sure you are prepared with all the information you need to file you IR3, you can download the ‘Individual income tax return guide 2018 (IR3G)’ from the IRD website or contact them to request a paper copy. This is also when you can claim your business expenses that you have recorded throughout the year.
One part of the form requires you to put in your ‘BIC’ code, which is a Business Industry Classification Code that determines the rate your ACC levies will be calculated at. The Business industry code Q879045, titled ‘ Homecare service, personal (excluding nursing)’ may be appropriate for many of the workers on Mycare, however, if you are part of a specific profession such as nursing or occupational therapy, or your work relates more closely to another type of business activity, another BIC code may suit your situation. More information about these can be found at www.businessdescription.co.nz where you can search by keyword or industry type and find descriptions on each BIC code.
Once you have submitted your tax return, you will receive notification from the IRD about any remaining tax to pay or a refund if you are entitled to one. The due date for paying end-of-year income tax is usually the 7th of February. If you need to pay over $2,500 in end-of-year tax you are likely to be required to pay provisional tax for the following tax year, which means you will make tax payments in installments throughout the year instead of all at once at the end.
The Voluntary Schedular Payments made through Mycare mean that 10% of what you have earned over the year through Mycare will already be reserved for income tax in your IRD account. Depending on your level of income and expenses, after you file your IR3 you may have to top this up and the end of the year or you may be entitled to a refund.