Inland Revenue was taking a much more relaxed approach to outstanding tax debt during 2020 and 2021 – but now it’s ready to crack down. Since the start of July, it has stepped up its efforts to pursue outstanding amounts from local businesses.
PAYE and KiwiSaver payments will be the first priority
The amount of outstanding PAYE and employee KiwiSaver payments have doubled, and overdue GST has tripled, over the past five years. This is obviously a major problem, particularly the KiwiSaver payments, because if these remain unpaid the employee is missing out on compounding gains that contribute to their retirement savings. It’s probably no surprise, then, to hear that the first priority for Inland Revenue when it comes to chasing debt will be businesses that have failed to pay their employee deductions.
If, for any reason, you think you might be short on paying PAYE, get in touch with us immediately. We can work with Inland Revenue and find solutions to help you – the sooner we start, the better, and the more effectively we can minimise any penalties.
Other areas of focus for the Inland Revenue
Over the past year, Inland Revenue has also been taking a tough approach to some other specific types of tax concerns:
- high earners who think they might be able to avoid paying the new 39% top tax rate using companies and trusts
- ute owners who avoid paying fringe benefit taxes
- real estate agents overstating their expenses or underreporting their income
- GST on land purchases by developers
- phoenix companies that are shut down and restarted to avoid tax debts
If you owe tax, don’t bury your head in the sand