KEY POINTS:
A new website that helps workers check if they are entitled to any unclaimed tax refunds has given back $5 million to Kiwi taxpayers since August.
Director of TaxRefunds.co.nz, Geoff Matthews, says his company is returning $100,000 a day into the pockets of New Zealanders.
Nationally, it has been estimated that up to $700m in tax refunds may have gone unclaimed since 2000 because many salary and wage earners no longer need to file a tax return.
Workers, especially anyone earning overtime, should check their tax status, Matthews says. "A few hundred dollars before Christmas is worth having."
There are several reasons why a taxpayer may have overpaid tax during the year - mainly linked to a fluctuating income level.
Someone could be eligible for a refund if, for example, they didn't work for a full year, had more than one job or have expenses to claim.
Matthews says: "When your income has highs and lows, the peaks get taxed at a higher rate than your overall income warrants. This means a refund is likely."
Workers paid commission on sales or cash bonuses, and those who do part-time, seasonal or overtime work, are most likely to have a refund due.
In assessments carried out by the company, a Fonterra worker received $23,700 over a three-year period because the worker's bonus payments were being taxed at too high a rate.
In another assessment, a freezing worker received a refund of $4781 for a five-year period because, as a seasonal worker, he was taxed at a higher rate in the months when he worked.
As well, many taxpayers with dependent children are unaware that they can claim a Working for Families tax credit.
"There's a huge amount of money to be claimed in Working for Families tax credits - most people think they earn too much to be eligible," Matthews says.
A solo mother with two children earning $70,000 a year found she was able to claim a refund of $6300 over two years in Working for Families tax credits through using the calculator on TaxRefunds.co.nz.
The biggest refund made through TaxRefunds.co.nz was for more than $50,000 claimable over three years by a low-income earner with children.
Matthews says: "If you earn $52,000 a year household income and have three children you are due back in tax $9672.
Over three years - there's $30,000. $10,000 refunds go through every day."
He says taxpayers don't claim their refunds because they don't know they are owed money, find completing a tax return too time-consuming or complicated, or don't trust the Government.
Their attitude is, "If Inland Revenue is not sending you a bill, keep your head down".
People wanting to find out if they're due a refund can check their tax status and request a refund through the Inland Revenue website at www.ird.govt.nz without the need for an accountant or a specialist service.
Inland Revenue produces about 400,000 tax assessments for people in specific circumstances, such as those receiving Working for Families tax credits. It also receives about 150,000 requests each year for tax assessments from people who believe they may have tax to pay or be owed a refund.
Taxpayers can also get a free, no-obligation assessment of whether they are owed a refund by logging on to TaxRefunds.co.nz, which charges a capped fee for filing the refund. The site is run by chartered accountants McKenzie Craik.
