ACC has recently begun sending bills to self-employed people for the first time in two years.
In the last few weeks self-employed Kiwis will have just received their first bill from ACC in two years. For many it will be their first ever ACC bill, and for some it will be a confusing and frustrating experience. For others it will be a mix of relief and concern: relief because they have been waiting a long time for a bill while unsure where they stand with ACC, and concern because they now have a significant bill to pay and less than a month to pay it.
Unlike those working in salaried employment who pay their ACC contributions via PAYE taxes, self-employed workers pay ACC annually on invoice.
In 2019 ACC didn’t send out any levy invoices, because they were changing their billing cycle to work differently. Instead of paying in advance, invoices have switched to paying in arrears, based on actual income earned. The system they used to have involved annual invoices being a combination of a wash-up of previous advance payments against actual earnings, and a pre-payment for the following year. That’s why the invoices ran over multiple pages and were quite confusing to read.
The changeover means that anyone who has become self-employed at any time within the last two years is now receiving their first bill from ACC – and expected to pay within a month. Some of these bills already threaten the use of debt collection agencies if they are not paid on time.
If individuals have not kept their information up to date at ACC, they may not even receive the invoice, meaning that a visit from the debt collectors could be the first they hear of it!
Update your business details here
I regularly find details recorded incorrectly. People working full time recorded as part time and vice-versa. People on a ‘default’ (very expensive) classification unit. For many self-employed people their bill could be a lot higher than necessary, or worse, a lot less than is actually required!
How MoneyTree can help
Get the right cover, and avoid over-paying. With your permission I can check your ACC records. I will check the Business Classification unit they are using to calculate your levy. I will check all the address and contact details are correct, that your working hours (full time/part time) are recorded correctly and look into whether CoverPlus Extra is right for you.
Cover-who, the what now?
ACC actually has a special version of their cover designed for self-employed workers and shareholder employees who do not receive PAYE income. While their standard 80% (ish!) of your wages cover is called CoverPlus, there is another version for the self-employed called CoverPlus Extra. It is agreed value, designed for business owners, and has some very important advantages. Check out my eBook about this.
If you or someone you know needs a hand managing their ACC cover and invoices please just get in touch with me.
