Pensioners struggle to pay thousands of dollars in surprise tax bills
Tuesday, 15 June 2021
Anne Marie Dowdeswell was shocked when she opened her tax bill and found she owed $1881.96 to Inland Revenue.
Dowdeswell receives superannuation on top of her fulltime job.
“Last year, I got a refund. I have not changed my job, I still do exactly the same thing. So, I just don’t understand why I have this bill.”
Compounding the stress of the almost $2000 tax bill is the news that she will start chemotherapy on June 21 to treat her leukaemia.
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Dowdeswell wanted to get the issue sorted before she underwent treatment but she was having trouble getting hold of Inland Revenue.
The problem appeared to relate to the use of the wrong tax code, she said.
“Ministry of Social Development sent a letter to Inland Revenue asking them to change my tax code, so they put me on S for two months and then they said no, that is wrong, changed it back to M and I have been on M ever since.”
Dowdeswell attempted to call Inland Revenue’s call centre after receiving the bill but, after going through all the options, the automated system said there were no available representatives and hung up.
She said she also emailed through the MyIR system but had not heard anything back.
Dowdeswell is not the only person on superannuation to be facing thousands of dollars of unpaid tax.
Trish Turney was working part-time until December last year. She also receives superannuation.
Before starting her job, she called Inland Revenue to ensure she was on the correct tax code.
The representative told her she should be on M.
“About three weeks ago I was shocked to be contacted by Inland Revenue who told me I owed them this huge amount. They said I had been using the wrong code,” Turney said.
According to Inland Revenue, Turney owes $2740.
“How could that have happened as I was told by them to use the M code after explaining all the details of what I was earning and receiving via superannuation.”
Turney said that next time, she would get everything in writing rather than relying on advice over the phone.
Inland Revenue is looking into the contents of the phone call.
As someone on superannuation, it was upsetting to land up with such a big bill, Turney said.
Her son has helped her pay the bill rather than risking being charged interest on the amount.
Both women contacted Stuff after reading about others who have received unexpected tax bills.
In a statement on Friday, an Inland Revenue spokeswoman said bills sent out this year were correct based on the employer information it had received and were due to the way the PAYE system works, not any fault in its own systems.
An extra pay period could have contributed to some people’s bills and these would be written off.
However, higher-than-expected tax bills could also be due to fluctuations in income throughout the year and use of incorrect tax codes, she said.
The spokeswoman declined to comment on the specific cases, citing privacy concerns.
Age Concern New Zealand chief executive Stephanie Clare said the organisation had not received any calls regarding tax issues and older workers.
“[But] if people find themselves with an unexpected tax bill, they should call the Inland Revenue and query it.”