Quick Summary
If you do not make your GST payment by the due date in New Zealand, the Inland Revenue Department (IRD) will charge late payment penalties and interest. These charges accrue from the due date until the payment is received, emphasizing the importance of timely payments.
Details
Understanding Late GST Payment Penalties
Beyond just filing your GST return on time, ensuring that any outstanding GST payment reaches the Inland Revenue Department (IRD) by the due date is equally critical. Late payments incur additional charges.
- Late Payment Penalties: The IRD applies specific penalties when GST is not paid by the due date. These are separate from late filing penalties.
- Interest Charges: In addition to penalties, interest will be charged on the overdue amount. This interest accrues daily from the due date until the payment is fully settled.
- Escalating Costs: Both penalties and interest can significantly increase the total amount owed, making timely payment financially advantageous.
- Remission of Penalties: In certain circumstances, the IRD may consider remitting penalties (though usually not interest) if there were unavoidable circumstances or if you have a good compliance history. However, this is not guaranteed.
- Proactive Engagement: If you foresee difficulties in making a payment on time, it's advisable to contact the IRD as soon as possible to discuss potential payment arrangements.
Source: GST guide (IR375)