Dear Inland Revenue Department,

Under the Official Information Act 1982, I request the following information.

For clarity, I have split my request into two parts.

Request part (a)

A copy of all documents and instructions held by the Inland Revenue Department relating to the application of the alternative tax rate for multi-year accident compensation payments. This is in reference to the amendment passed in the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Bill, which inserted new sections RD 20B and RD 20C into the Income Tax Act 2007.

Request part (b)

Any information, including internal guidance or correspondence with ACC, that clarifies the definition and application of a "period of more than 1 income year" as it applies to backdated lump sum payments under the legislation referenced above.

To assist with this request, I provide the following statement that I received from ACC:

"ACC received communication from IRD in the form of instructions that the alternate tax rate can only be apply if the following situation applies."

"The alternate tax rate is only applicable to multi-year backdated lump sum payments that covers more than 1 tax year where a payment needs to cover a full tax year + 1 day."

(ACC provided the following example) "A backdated payment from 13/12/2023 – 04/08/2024 which does not cover a full tax year + 1 day...As it is 2 partial tax years (13/12/2023 – 31/03/2024: not a full tax year & 01/04/2024 – 04/08/2024: not a full tax year) Is not eligible for the alternate tax rate."

Thank you for your assistance.

Yours faithfully,

Ben Arnold