Proposed amendments
Hon Todd McClay, in Committee, to move the following amendments:
Clause 2
In clause 2(2)(b), replace “and 41(2)”
(page 15, line 8) with “41(2), and 44A to 44D”
.
New clauses 44A, 44B, 44C, and 44D
After clause 44 (page 33, after line 4), insert:
44A Section 135G amended (Discretionary relief for residual incremental penalty debt)
(1)
Replace section 135G(1)(b) with:
(b)
the Commissioner is satisfied—
(i)
that recovery of the incremental penalties would place the liable person in serious hardship; or
(ii)
that it would be fair and reasonable to grant relief.
(2)
In section 135G(2), replace “(1)(b)”
with “(1)(b)(i)”
.
44B Section 135GA amended (Discretionary relief for residual penalty-only debt)
(1)
Replace section 135GA(1)(b) with:
(b)
the Commissioner is satisfied—
(i)
that recovery of those penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
(ii)
that it would be fair and reasonable to grant relief.
(2)
Replace section 135GA(2)(b) with:
(b)
the Commissioner is satisfied that those penalties relate to, or arise from, some or all of that written-off benefit component; and
(c)
the Commissioner is satisfied—
(i)
that recovery of those penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
(ii)
that it would be fair and reasonable to grant relief.
(3)
In section 135GA(3), replace “(1)(b) or (2)(b)”
with “(1)(b)(i) or (2)(c)(i)”
.
44C New section 135JA inserted (Relief from incremental penalties unpaid before deduction plan made on or after 1 April 2016)
After section 135J, insert:
135JA Relief from incremental penalties unpaid before deduction plan made on or after 1 April 2016
(1)
For the purposes of this section,—
deduction plan means a plan made on or after 1 April 2016 by the Commissioner in relation to a liable person—
(a)
that is a plan for the collection, by way of automatic deduction under Part 10 from relevant payments, of—
(i)
the amount of the initial debt; and
(ii)
the amount of financial support (if any) that the liable person will become liable to pay during the term of the plan; and
(b)
that is not made with the agreement of the liable person
initial debt, in relation to a deduction plan, means the amount the liable person owes in respect of financial support and related initial late payment penalties at the time the deduction plan is made
relevant deduction notice, in relation to a deduction plan, means a deduction notice given by the Commissioner under section 154 for the purpose of collecting amounts in accordance with the deduction plan
relevant payments means payments of—
(a)
income specified in paragraph (a) of the definition of withholding income in section 2(1); or
(b)
earnings related compensation (as defined in section 82(9) of the Tax Administration Act 1994); or
(c)
a benefit of the kind referred to in section 131; or
(d)
a basic grant or an independent circumstances grant under the Student Allowances Regulations 1998
review date means—
(a)
the day that is 26 weeks after the date on which the deduction plan is made; and
(b)
each of the days on which there expire periods of 26 weeks that consecutively succeed the first period of 26 weeks described in paragraph (a); and
(c)
the day on which the deduction plan expires.
(2)
If a deduction plan has been made and the deduction plan has been complied with up until a particular review date in accordance with subsection (3), the Commissioner must, on that review date,—
(a)
review the incremental penalties in relation to the initial debt of the liable person that were unpaid at the time the deduction plan was made; and
(b)
write off those penalties proportionally in accordance with subsection (4).
(3)
For the purposes of subsection (2), a deduction plan has been complied with up until a particular review date if all of the deductions and payments required to be made under relevant deduction notices by that date have been made in accordance with those notices.
(4)
For the purposes of subsection (2), the proportion of incremental penalties that must be written off must be calculated in accordance with the following formula:
r = [(a × c) ÷ b] − d
- r
is the amount of incremental penalty that is to be written off
- a
is the total amount of the initial debt that has been paid since the deduction plan was made
- b
- c
is the total amount of incremental penalties related to the initial debt of the liable person that were unpaid at the time the deduction plan was made
- d
is the total amount of incremental penalties related to the initial debt of the liable person that have already been written off in accordance with this section since the deduction plan was made.
(5)
If an incremental penalty that is written off under this section has been paid in whole or in part, the Commissioner must refund to the liable person the whole or part of the incremental penalty that has been paid.
44D Section 135L amended (Writing-off of incremental penalties if non-compliance with arrangement)
After section 135L(2), insert:
(2A)
Subsection (2B) applies if,—
(a)
at the time of a review date in relation to a deduction plan under section 135JA, there has been a failure to make any deduction and payment in accordance with a relevant deduction notice (as defined in section 135JA); and
(b)
the Commissioner is satisfied, in respect of each failure to make a deduction and payment in accordance with a relevant deduction notice (as defined in section 135JA), that the circumstances in relation to the failure would, if they were related to the payment of a debt to which a penalty relates, entitle the Commissioner to grant relief under any of the provisions of sections 135B to 135E.
(2B)
The Commissioner may disregard a failure to make a deduction and payment for the purpose of applying section 135JA.
Clause 50
In clause 50(8), new clause 8J, replace “43 to 46”
(page 38, line 17) with “43, 44, 45, and 46”
.
Clause 55
Replace clause 55 (page 39, lines 5 to 7) with:
55 Section 43 amended (New section 135FA inserted)
(1)
In section 43, replace new section 135FA(2) with:
(2)
The Commissioner may grant relief to the liable person in the manner prescribed by section 135A in respect of the incremental penalties of the liable person that were unpaid at the time a payment agreement was entered into if the Commissioner is satisfied—
(a)
that recovery of those incremental penalties would place the liable person in serious hardship (as defined in section 135G(3)); or
(b)
that it would be fair and reasonable to grant relief.
(2)
In section 43, new section 135FA(3), replace “(2)(b)”
with “(2)(a)”
.