As part of Budget 2024, the government has allocated Inland Revenue an additional $116 million in compliance funding over the next four years. Much of this will be directed towards recovering a tax debt of almost $7.4 billion currently owed by Kiwis.
While 90% of taxpayers are up to date with tax payments, the total tax debt owed to Inland Revenue has escalated significantly since COVID. Many businesses are finding it hard to keep up, with Inland Revenue debt increasing by 50 percent since 2022.
The budget boost has already translated into increased compliance activity, particularly in the construction sector, where tax avoidance through cash work is known to be an issue. Inland Revenue started making unannounced visits to construction sites in April this year in an effort to crack down on those actively avoiding their tax obligations.
The message to business owners is for those who are actively avoiding their tax obligations, time is running out. However, if you are struggling to keep up with tax payments due to circumstances outside your control or due to financial hardship, there are options available so you don’t end up on the wrong side of Inland Revenue.
As tax agents, we have a responsibility to ensure all of our clients are compliant with their tax obligations. We’ll always work with you to ensure you stay informed about how much tax you owe, and make a plan for how best to meet your obligations. If you’re struggling the best thing to do is keep up with your tax obligations or talk to us – as early as possible We can communicate with the Inland Revenue on your behalf and negotiate instalment plans. We can also assist with planning and business advice to help your business survive the tough times and to thrive in the future.
If you are struggling to meet your tax obligations, contact us now for a quick chat about how we can work through this together.
