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Thread ID: 118010	2011-05-15 23:21:00	PAYE - How to reduce costs - A suggestion	woc (13210)	PC World Chat

Post ID	Timestamp	Content	User
1202353	2011-05-16 09:59:00	You keep assuming that I want to 'force' businesses into using a Government system . Under the scheme you propose, every company would be required to pay for an accounting package that they may not even use or want - and even if they did decide to use it, they would then face the additional costs of migrating their data to a new system . That is not the case . What I am saying is that such a system will make it easy for small business to go online and compete their staff pays etc without any additional cost and minimal effort, and at the same time fulfill their obligations to the IRD . Save in the knowledge that their data will always be available should the Labour department want to examine their records . What you're not taking into account is that the IRD already offer online data entry, and paper forms can be largely processed by OCR systems . Even if manually entered (i . e . poor quality handwriting on a form), it takes a few minutes per form at most, and would likely be paid at or near the minimum wage - data entry doesn't require any notable skills . I have not found any online entry available . Are you referring to the uploading of electronic forms . I never suggested that it did require skill, but it is still a cost that would offset the costs of maintaining a electronic system . I still don't understand why you think the IRD should spend taxpayer money on developing and maintaining yet another accounting package, which would provide no tangible benefit (if you can see a benefit to this then please by all means point it out, because I can't see one) when there are already many of them available - could you expand this point further? Business are in business to make a profit, and if we take the software industry for an example continually 'upgrade' in order to 'encourage, persuade, or even force' their users to continually purchase the latest version . These cost are disproportional in a small business than they are in a larger business . The government is continually changing the laws relating to PAYE and there is a need for any software to reflect these changes . It is for this reason why I am not in favor of open software (I am not aware of any currently available in NZ) The other software that is free is not that easy set up and there is no guarantee that it will either continue to be free or available . You seem to forget that if a business pays another business to purchase software or do it online that the costs for that are tax deductible and it therefor is a cost to government which your taxes pay for indirectly . Do you have a interest in a business in the tax related business?	woc (13210)
1202354	2011-05-16 10:52:00	You keep assuming that I want to 'force' businesses into using a Government system . That is not the case . I'm not assuming that at all - I'm assuming that you are wanting to force businesses into paying for such a system via their taxes . If that isn't what you're proposing, then who are you suggesting should pay for it? What I am saying is that such a system will make it easy for small business to go online and compete their staff pays etc without any additional cost and minimal effort, and at the same time fulfill their obligations to the IRD . Save in the knowledge that their data will always be available should the Labour department want to examine their records . That is what accounting / payroll software is for - what does your proposal do that existing software does not? You stated earlier in this thread that you aren't intending this to provide a better service than what already exists, but as a means to reduce ongoing operating costs . As far as I can see, you haven't provided a single valid means by which your proposal could achieve that reduction that isn't already easily available . I have not found any online entry available . Are you referring to the uploading of electronic forms . I think I'm referring to this ( . ird . govt . nz/payroll-employers/returns-payments/ir-file-option/" target="_blank">www . ird . govt . nz), although as I haven't used that system myself I wouldn't swear that's the correct URL . Most IRD returns can be submitted online . I never suggested that it did require skill, but it is still a cost that would offset the costs of maintaining a electronic system . Really? For that to make an appreciable difference, you would need to shift a substantial number of businesses to using the new system, which they won't do unless they gain significant benefits - migrating to a new accounting package has costs attached . If this doesn't happen, then you are unable to cover the capital cost of development and integration with the IRD's existing systems, and potentially the maintenance as well . If your system isn't better, then how do you plan to convince businesses to migrate? Business are in business to make a profit, and if we take the software industry for an example continually 'upgrade' in order to 'encourage, persuade, or even force' their users to continually purchase the latest version . These cost are disproportional in a small business than they are in a larger business . Naturally, but in all applicable cases those costs are trivial compared to the cost of employing even a single person . Accounting software is comparatively very cheap . The government is continually changing the laws relating to PAYE and there is a need for any software to reflect these changes . It is for this reason why I am not in favor of open software (I am not aware of any currently available in NZ) The other software that is free is not that easy set up and there is no guarantee that it will either continue to be free or available . Of course - and this is why the vendors of accounting software constantly update it . If you don't want to pay for one, then you are free to use an open-source one (which you can even alter yourself should you wish to), or leave yourself at the mercy of a closed vendor, or limit yourself to a spreadsheet or database system . All are valid options . You seem to forget that if a business pays another business to purchase software or do it online that the costs for that are tax deductible and it therefor is a cost to government which your taxes pay for indirectly . What kind of economic garbage is that? Expensed items are not purchased by the government, and any financial impact to the government is limited to the opportunity cost of the taxable portion of the income used to purchase the item (i . e . 30%) . Company tax is not charged at 100%, it's charged at 30% - and therefore a privately purchased, expensed solution actually costs the government *less* than it would to implement its own system, unless continuing to use that private system costs over three times more than it would cost to build, integrate, migrate to and maintain a government solution . Is your proposal really that cheap to implement? Do you have a interest in a business in the tax related business?Depends what you mean by an interest . I don't derive any income from selling financial products or services, if that's what you're asking, nor do I own any shares in companies which do .	Erayd (23)
1202355	2011-05-16 18:37:00	[QUOTE=Erayd;1017901]I'm not assuming that at all - I'm assuming that you are wanting to force businesses into paying for such a system via their taxes . If that isn't what you're proposing, then who are you suggesting should pay for it?[Quote/] Without a cost benefit analysis I cannot prove that there will be a saving to the crown, however the evidence from http://thankyoupayroll . co . nz/ would indicate that . A: The costs involved in setting up a system that integrates with the IRD is not high . B: The cost to run the system is lower that the subsidy currently provided to Tax agents . [Quote] I think I'm referring to this, although as I haven't used that system myself I wouldn't swear that's the correct URL . Most IRD returns can be submitted online . [QUOTE/] The link is correct however that just provides business whom are registered for online reporting to submit electronically forms . All the offline payroll software create forms that can be uploaded to the service . I think that online services also use this system to upload the required data . The integration that you mentioned to is already there . I feel that you are just philosophically opposed to the idea . There are none so deaf as those that don't want to hear .	woc (13210)
1202356	2011-05-16 21:12:00	Without a cost benefit analysis I cannot prove that there will be a saving to the crown...That's reasonable - as you're not the IRD, and unlikely to be familiar with their internal IT systems, nobody would expect you to have the necessary information to perform a formal analysis. You can however logically process the facts that you do have to see if such a system would be viable. ...however the evidence from http://thankyoupayroll.co.nz/ would indicate that....What evidence? Could you please link directly to the page you're referring to? I've taken a look at that site; it simply appears to be a basic payroll accounting business that manages to make a profit almost exclusively off IRD's payroll subsidy - the mere existence of such a business is not evidence to support your point, because it doesn't explain the following: A: The costs involved in setting up a system that integrates with the IRD is not high.How did you reach that conclusion? Such a system would require integration with the existing mainframe processing environment (not cheap), integration with the replacement for that environment, development of the software itself, technical and usability testing, training of support staff, feature parity with existing accounting software, and some kind of incentive for businesses to switch to it. B: The cost to run the system is lower that the subsidy currently provided to Tax agents.Again, how did you reach that conclusion? Remember that any potential saving to the IRD is only: The margin between subsidies and the cost to set up and maintain a new system, only for those companies which switch to the new system who were previously claiming a subsidy. The savings resulting from lower auditing costs of those who previously weren't using an accounting package at all, and weren't keeping good electronic accounts. If only a few companies switch, then it's a large expense with no fiscal benefit, because the number of formerly-subsidy-claiming or bad-accounts-managing users is too low to cover costs. Your point about the cost of data entry has already been shot down as a non-benefit, partly by you yourself, as you have noted below: "All the offline payroll software create forms that can be uploaded to the service". The link is correct however that just provides business whom are registered for online reporting to submit electronically forms. All the offline payroll software create forms that can be uploaded to the service. I think that online services also use this system to upload the required data. The integration that you mentioned to is already there. Aren't you just arguing against yourself with that statement? If the integration already exists, and is supported by current payroll software, then what is the benefit of developing an accounting package that simply duplicates what is already available? I feel that you are just philosophically opposed to the idea.I am philosophically opposed to my tax dollars being wasted. If you can demonstrate that your proposal isn't a waste, then I would have no problem supporting it. There are none so deaf as those that don't want to hear.I find that hilarious. I have logically analysed and responded to all of your points, you have ignored most of mine (and still haven't provided a rational justification for your idea), and yet I'm the one you're calling deaf :rolleyes:. Thus far, your argument seems to boil down to these points only: You don't like paying the relatively trivial cost of accounting software; and You think everybody else should help cover your costs by having the IRD use tax revenue to develop a duplicate product and then offer that to you for free; and You think that such a system would save the IRD money versus the status quo, but are unable to logically back up that position. I would be more than happy to support your idea if you can justify why it is better than the status quo, but so far you appear either unable or unwilling to do so.	Erayd (23)
1202357	2011-05-16 21:27:00	www.stuff.co.nz It might have even been here I first read that, but yeah not realistic to say IT projects are cheap for the IRD.	Alex B (15479)
1202358	2011-05-16 22:19:00	As a small business owner employing one person I would like to confirm that the IRD does indeed provide an easy way to enter your employer monthly schedule and deduction forms online. They prefill most of the boxes. It takes about two minutes per employee. The area is called ir-file and you use your online account. Yes, it would be nice if the PAYE calculator could integrate into that - but (as much as I find it a mundane process I'd rather avoid) the entire process involves no paper and takes, for me, around 20 minutes per employee per month, which includes the time I take to calculate the hours, travel allowance etc and produce a payslip. I don't think cutting that 20 down to 10 would be of significant value to anybody (keeping in mind that larger companies would use payroll software so this would not be an issue). It seems (with all due respect, and I do not mean to be insulting) you simply need to learn what the existing options the IRD provides are. If you give them a call you will find they tend to be very nice and helpful :).	george12 (7)
1202359	2011-05-17 11:41:00	Thus far, your argument seems to boil down to these points only: You don't like paying the relatively trivial cost of accounting software; and You think everybody else should help cover your costs by having the IRD use tax revenue to develop a duplicate product and then offer that to you for free; and You think that such a system would save the IRD money versus the status quo, but are unable to logically back up that position. I would be more than happy to support your idea if you can justify why it is better than the status quo, but so far you appear either unable or unwilling to do so. Agree 100%	DeSade (984)
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