Majority of taxpayers comply with our self assessment based tax system and report correctly their true financial position. However mistakes can be made inadvertently and remain undiscovered for a sometime.

Weather you have made a mistake and omitted some income or expenses inadvertently or you may cut corners or not fully disclose your income to the IRD you can make a voluntary disclosure. A voluntary disclosure tells the IRD what is wrong with your tax returns before the IRD find it out themselves through an audit or review.

Anyone can make a voluntary disclosure – salary or wage earners, individuals, businesses, trusts and employers.

How does a voluntary disclosure help?

Often what may seem to be trivial omissions at first can collectively become a serious issue. The longer you leave your under-paid tax undeclared, the more likely you are to be caught out and the less favourably the IRD will look on your case.

You will also be hit with a number of penalties and interest charges, criminal prosecution, liquidation of you business and bankruptcy are on the cards as well depending on the seriousness of the case.

By doing a voluntary disclosure you are showing the IRD your willingness to put things right. According to the Standard Practice Statement 09/02a voluntary disclosure that is made under section 141G or section 141J of the Tax Administration Act 1994 is eligible for a shortfall penalty reduction provided;

A taxpayer can make a full voluntary disclosure either before the taxpayer is first notified that a tax audit is pending (“pre-notification disclosure”), or after the taxpayer is first notified of a pending audit but before the audit starts (“post-notification disclosure”).

In Summary

It’s always better to set your tax matters straight before the IRD find out. It not only saves you money but will certainly save you a lot of sleepless nights. Speak with your financial advisor/accountant or contact us if you are in a situation which requires a voluntary disclosure or if you are not sure if you require a voluntary disclosure. Call us for a confidential discussion and we can advise you on the best course to take.

We often hear about people getting big tax refunds and some tax refund companies advertise this so vigorously that it creates the perception that everyone on salary or wages is owed a tax refund by the IRD and can get it.

However this might not always be the case and if you have been issued a PTS (personal tax summary) or have requested a PTS which results in tax to pay. Well you have to pay it.

So how do can we reduce the chances of having to pay tax at the end of the tax year.

If you earn salary or wages or are on a benefit

To reduce your chances of having a bill to pay next year make sure you use the right tax code. Your tax code is important because it helps your employer know how much tax to deduct from your income.

​If you’re self-employed or earn business income

To reduce your chances of having a bill to pay next year plan ahead to pay your income tax. The amount of income tax you’ll have to pay is based on your net profit for the year. It’s a good idea to use a separate bank account to put money aside to cover the income tax you’ll need to pay.

If you pay provisional tax during the year make sure you use the right calculation option for your situation and make your payments on time.

If you follow the estimation option, be careful when estimating the amount you pay. Remember to re-estimate whenever your income or situation changes.

If you aren’t required to pay provisional tax, your income tax assessments will always come at the end of the year.

Having trouble paying your provisional tax or you always have a large tax bill at the end of the financial year? Contact us for a discussion on how we can help you sort out your tax issues.

If you earn income that’s not from salary or wages and have a student loan

You need to make other payments towards your loan if your income isn’t from salary or wages. You’ll need to work out your repayments if you have adjusted net income requiring IR3 income tax return or a personal tax summary.

​If you receive Working for Families Tax Credits

To reduce your chances of having a bill to pay next year make sure you only receive the tax credits you’re entitled to. If your income is uncertain, consider receiving your entitlement as one lump sum at the end of the year instead of weekly or fortnightly.

If you have income from multiple sources or have investments income its best to seek professional advice.

What to do if you have overdue tax returns

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Running a business can be hard and filing of tax returns can be the last thing on your mind. We have seen many cases where business owners are at-least 2 years behind in filing their tax returns. Problems such as cash-flow issues, day to day running of the business and the uncertainly of the final tax bill prevents the timely filing of tax returns.

But does late filing of tax returns help?

The simple answer is NO. It only aggravates the problem. Not filing tax returns on time does not mean that you do not have to pay any tax. It means when the returns are filed you will not only have a tax bill but that bill will be inflated by late payment penalties and interest charges.

But what if you filed the tax returns and did not have the fund to pay it all?

Not a problem, we help our clients enter into arrangements with the IRD to pay it off over time. By doing this you will avoid late payment penalties while remaining compliant with your tax obligations.

All business face problems and the IRD are aware of this. There are multiple ways we help our clients to keep on top of their taxes. Running away from filing tax returns or delaying payment as much as possible does not work and will land you in more trouble.

As the saying goes nothing is certain but death and taxes. We cannot help you with death however contact us today if you want to keep on top of your taxes.