169 Unpaid tax payments, etc, to constitute charge on employer’s or PAYE intermediary’s property

(1)

Where an employer fails wholly or in part to withhold or deduct an amount of tax or combined tax and earner-related payment in accordance with the employer’s obligations under the PAYE rules and, where applicable, section 115 of the Accident Rehabilitation and Compensation Insurance Act 1992 or section 285 of the Accident Insurance Act 1998 or section 221 of the Accident Compensation Act 2001, or is liable to pay any sum to the Commissioner under the PAYE rules and, where applicable, that section 115 or that section 285 or that section 221, an amount equal to the total for the time being unpaid to the Commissioner in respect of that tax, payment, or sum, (including any late payment penalty or shortfall penalty), and in respect of any judgment obtained for that tax, payment, or sum, (including any costs, fees, or expenses included in the judgment or otherwise payable by the employer to the Commissioner in respect of the judgment) shall be a charge on all the real and personal property of the employer.

(1B)

This section applies to a person instead of an employer if the person is acting as a PAYE intermediary for the employer in relation to an employee and a pay period, and the employer, for the pay period, has—

(a)

paid to the person the salary or wages relating to the employee as required by sections RP 9 to RP 11 of the Income Tax Act 2007:

(b)

provided the information required by the person as required by section RP 8(b) of that Act.

(1C)

For the purpose of applying this section to a person acting as a PAYE intermediary, references to an employer are to be read as references to a person acting as a PAYE intermediary.

(2)

Every charge created by this section shall be subject to all mortgages, charges, or encumbrances existing at the time of the creation of the charge, but, subject to this section, shall have priority over all other mortgages, charges, or encumbrances. Notwithstanding anything in any other Act, if any property subject to the charge created by this section is also subject to a charge created by that other Act, the charges shall rank equally with each other unless by virtue of that Act the charge so created would be deferred to the charge created by this section.

(3)

Despite section 23(b) of the Personal Property Securities Act 1999, if a charge affects property of a particular kind and the provisions of a registration Act applicable to the property provide for the registration of charges or security interests over property of that kind, the Commissioner may have particulars of that charge recorded on the register without payment of any fee.

(4)

Particulars recorded under subsection (3) are to operate and take priority according to the provisions of the applicable registration Act.

(4B)

If a mortgage that affects the same property is registered before the registration of the charge under this section and money secured by the mortgage is advanced after the registration of the charge under this section, the charge has priority over the mortgage in respect of that money.

(5)

On the satisfaction of a registered charge, the Commissioner must release the charge in the manner required by the Act under which it was registered, with such modifications as may be necessary, and without being required to pay a fee.

(6)

Any charge created by this section which is registered against any property shall operate to secure any amount secured by any prior unregistered charge and unpaid at the time of the registration of the charge, and also to secure any amount secured by any charge coming into existence after the registration of the charge, to the intent that the registered charge shall operate to secure the total of all amounts for the time being owing by the employer under all charges created by this section.

(7)

If any amount constitutes by virtue of this section a charge on any property the High Court may make such order as it thinks fit, either for the sale of that property or any part of that property, or for the appointment of a receiver of the rents, profits, or income of that property, and for the payment of the amount of the charge and the costs of the Commissioner out of the proceeds of the sale or out of the rents, profits, or income.

(8)

Where any property has been sold under any such order, the High Court may, on the application of the purchaser or the Commissioner, make an order vesting the property in the purchaser.

(9)

Every such vesting order shall have the same effect as if all persons entitled to the property had been free from all disability and had duly executed all proper conveyances, transfers, and assignments of the property for such estate or interest as is specified in the order, and in the case of land which is subject to the Land Transfer Act 1952 the purchaser’s title to that land shall be registered accordingly.

(10)

This section shall apply subject to section 167.

(11)

In this section, registration Act, in relation to any property, includes—

(a)

the Statutory Land Charges Registration Act 1928, in every case where the property is land or an interest in land (including a mortgage):

Compare: 1976 No 65 s 367; 1994 No 76 s 57

Section 169 heading: amended, on 1 April 2008 (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).

Section 169 heading: amended, on 26 March 2003 (applying for pay periods beginning on and after 1 April 2004), by section 144(1) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).

Section 169(1): amended, on 21 December 2010, by section 189 of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).

Section 169(1): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).

Section 169(1): amended, on 1 April 2002, by section 338 of the Injury Prevention, Rehabilitation, and Compensation Act 2001 (2001 No 49).

Section 169(1): amended, on 19 December 1998, by section 416 of the Accident Insurance Act 1998 (1998 No 114).

Section 169(1): amended, on 26 July 1996, by section 50 of the Tax Administration Amendment Act (No 2) 1996 (1996 No 56).

Section 169(1B): inserted, on 26 March 2003 (applying for pay periods beginning on and after 1 April 2004), by section 144(2) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).

Section 169(1B)(a): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).

Section 169(1B)(b): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, unless the context requires otherwise), by section ZA 2 of the Income Tax Act 2007 (2007 No 97).

Section 169(1C): inserted, on 26 March 2003 (applying for pay periods beginning on and after 1 April 2004), by section 144(2) of the Taxation (Maori Organisations, Taxpayer Compliance and Miscellaneous Provisions) Act 2003 (2003 No 5).

Section 169(3): replaced, on 25 November 2003, by section 137(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 169(4): replaced, on 25 November 2003, by section 137(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 169(4B): inserted, on 25 November 2003, by section 137(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 169(5): replaced, on 25 November 2003, by section 137(1) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 169(9): amended, on 25 November 2003, by section 137(2) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).

Section 169(11): replaced, on 25 November 2003, by section 137(3) of the Taxation (GST, Trans-Tasman Imputation and Miscellaneous Provisions) Act 2003 (2003 No 122).