Tax: more time to get a little of what's yours

By MARK FRYER

A step back by the Government is a step forward for taxpayers.

Finance Minister Michael Cullen this week announced an extension to the deadline for claiming tax rebates for charitable donations and the cost of childcare or housekeeping.

Previously, anyone claiming those rebates had about two months left, with a September 30 deadline for most taxpayers.

Now the time limit will be extended to eight years - the same time allowed for claiming back overpaid tax.

Dr Cullen said the amendment would be included in a bill now before Parliament's finance and expenditure select committee.

The change means more time for taxpayers to claim rebates for the 2000-01 tax year, which ended on March 31.

What's more, if you forgot to claim rebates for the 1999-2000 year you can now do so - assuming you have not thrown away your receipts in the meantime.

"Taxpayers will definitely be the winners as a result of this decision," said Jeff Owens, tax director of the Institute of Chartered Accountants, which has repeatedly argued against the September cutoff date.

"We estimated that $14 million of claims would have been disallowed this year alone if this change was not made."

Changes to the rebate deadline have been something of a comedy of errors.

The date was changed to September 30 in the 1999-2000 tax year when, for the first time, rebates had to be claimed separately, rather than as part of the annual tax return.

Until then Inland Revenue had been prepared to pay rebate claims even if they were filed late, said Mr Owens.

A month before that deadline was to expire, Dr Cullen announced a supposedly one-off extension, giving taxpayers another three months' grace.

He explained that taxpayers were not getting the message about the new system, and stood to miss out on rebates totalling about $35 million.

Even with the extension, the number of people claiming rebates fell by over 100,000.

Mr Owens said it was good that taxpayers no longer had to file a tax return just to get a rebate.

But many could miss out as there was no longer a "trigger" to remind them to claim, he said.

"There are many many taxpayers who still regard rebates as part of the tax process."

While the Government's change of heart is welcome there may be a slight delay, since the legislation is not expected to be passed until October.

That means taxpayers claiming after September 30, or for 1999-2000 rebates, may face a wait before they get their money.

* REBATE RULES: You can claim up to $810 in rebates - a third of any charitable donations, to a maximum rebate of $500, and a third of childcare and/or housekeeping in some circumstances, to a maximum rebate of $310.

Claiming a rebate is no longer part of filing a tax return. Regardless of whether you need to file a return, you claim your rebates on a separate claim form (IR526). If you haven't already been sent a rebate claim form, you can get one by calling Inland Revenue on 0800 257-773.