Inland Revenue data reveals that $162 million in tax refunds remain unclaimed from the last six tax years.
Most individuals paying tax through the PAYE system have their income tax automatically assessed by Inland Revenue each year, which can result in either a tax bill or a refund if the wrong amount of tax has been paid. If Inland Revenue has the person’s bank account details, any refund can be paid directly into their account.
However, data released under the Official Information Act reveals that 53,371 refunds from 2019, totalling $17.2 million, remain unclaimed.
Approximately the same number of refunds from 2020 are still unclaimed, with slightly more from 2021. Recent years show higher amounts pending, including 148,205 refunds valued at $61.1 million from the most recent tax year.
As a proportion of total refunds, the unclaimed amounts are relatively small, ranging from 1.2% in 2019 up to 3.4% for the 2024 tax year. Inland Revenue explained that the lower percentage of unclaimed refunds in earlier years reflects the longer time available for individuals to claim their refunds.
Deloitte tax expert Robyn Walker explained that some individuals might hesitate to claim their refunds because they worry about potential errors in other tax years or types and may leave their refund with Inland Revenue as a way to cover any additional tax liabilities that might arise.
“I’m sure there might be logical reasons for other people not to seek a refund, it may be that they are relatively small amounts or potentially they don’t have an available bank account for the refund to be paid into, which would be strange but potentially could be conceivable in some situations.”