Inland Revenue tell us they want to make tax simpler, more open and more certain for everyone.
One way they do that is by sharing their compliance focus, so that it’s clear for everyone the key areas they’re looking at and key things people need to do to get their tax and entitlements right.
Now’s the time to share the Compliance Focus booklet and help you understand what you need to do to get your taxes right and avoid penalties and interest.
At Savage & Savage we put a strong focus on ensuring your accounts comply with tax regulations and while some of the things we ask you for may seem irrelevant we need ALL of your financial information to help you stay on the right side of the tax man.
You can download the latest IRD Compliance Focus booklet here for full details.
In summary here are some (but not all) key compliance points IRD will be focusing on in 2014-15 (extracts from IRD Compliance Focus Booklet 2014-15)
Paying your tax on time
Whether we’re talking tax, student loans or child support—most people pay on time. Most people also file on time. We know that when it comes to tax, if a customer doesn’t file a return on time, they may also struggle to pay the tax they owe on time. In all cases, paying what you owe by the due date means avoiding penalties and interest. That’s why we work hard to make it as easy as possible for you to file and pay on time and contact us quickly if you miss a due date.
People with high wealth or high income
People who have significant assets or high income often have complex tax affairs. Like everyone else, most people with high wealth pay the right amount of tax at the right time, but sometimes people make mistakes and don’t get their taxes quite right. We have a dedicated team that helps these customers get back on track.
The property business
Whether you’re buying or selling property for profit, renting out a property you own or having boarders stay in your family home, it pays to know the rules. That way you won’t end up with an unexpected tax bill to pay.
People can choose to use trusts in their personal or business affairs. If you set up, manage, or receive income from a trust, make sure you understand and meet your tax responsibilities. Otherwise, you might face penalties or end up with an unexpected tax bill.
It’s not worth the risk
We know that sometimes people make honest mistakes with their tax or entitlements. When this happens, we’re here to help them get back on track. It’s rare, but sometimes people try to avoid paying the tax they owe or get more entitlements than they should. We’re always working to improve our systems and processes, so that we can spot when this happens and take action. For people who don’t do what they’re meant to, the consequences can be serious. They could end up in prison or with substantial financial penalties. It’s just not worth the risk.
Fraud and identity theft
It’s infrequent, but people sometimes: • create fake documents or identities or intentionally provide incorrect information to pay less tax or get money from us—and that’s fraud • use another person’s IRD number to get money from us—and that’s identity theft, which is a form of fraud.
Under-reporting income and operating outside the system
Most people report their income correctly and pay the right amount of tax. But a small number intentionally underreport their income and pay less tax than they should.
• some businesses may get an unfair competitive advantage over other businesses that pay the right amount of tax
• government has less to spend on services that make New Zealand a great place to live, like schools and hospitals
Aggressive tax planning
A small number of people try to avoid paying the tax they should or boost entitlements to social benefits by using inappropriate or unlawful tax structures. We call this aggressive tax planning (ATP)