Tax arrears- Covid-19

Covid-19 has had a huge effect on small and medium sized businesses have struggled to pay their taxes on time. Every day we are reading of lay-offs and businesses going into liquidation and this is expected to continue for some time. If you are a small or medium sized business, you have probably experienced a downturn since Covid-19 hit. The pressure that businesses are under has meant [...]

Covid 19 and my business

When a pandemic or epidemic hit, many industries are affected, the health sector, obviously, but what about your business? A paper investigating the economic Impact of the 2015 Middle East respiratory syndrome coronavirus (MERS-CoV) outbreak on the Republic of Korea's tourism-related industries finds that the relatively brief outbreak was associated with 2.1 million fewer non-citizen visitors, whi [...]

The age-old question – to contract or not.

"That contractor is on $25 more an hour than me and we're doing the same job!"Sounds unfair but, before you jump into self-employment with both boots, read on...As a contractor working for someone else, you will probably be responsible for your own tax.Filing each year generates tax to pay. Income tax and provisional tax are the same tax — provisional tax is just a way of pre-paying your annual [...]

The Perplexing PAYE Problem

In the field of tax debt, no tax type is so overwhelming, difficult to write off, personally affecting, and criminally prosecutable as not passing on your employees’ PAYE to the Inland Revenue. That’s not to say that if you fall behind in your PAYE you cannot work out a repayment schedule – however, the powers awarded to the Commissioner regarding failure to file or pay PAYE are weighty. S [...]

2019 Review and Achievements

We've had quite the busy year at Tax Debt Management, I have personally handled over 100 cases of pending liquidation, bankruptcy and general arrears worth an average of approximately $160k each! Top value case was $3m negotiated to $750k and best write off was – well, the same case! We've also entered the liquidation assistance market, helping Directors and shareholders of liquidated companies [...]

Can’t pay – or won’t pay?

According to the Government’s Tax Working Group, almost all of IR’s tax indebted taxpayers can be classified into three broad groups – 1) disorganised, 2) can't pay and 3) won't pay. Placing taxpayers into these three groups allegedly helps IRD to understand drivers and behaviours and easily pair an appropriate response to effectively encourage them to comply. Or that's the idea... [...]

Seasonal work and how to manage cash flow

Various businesses are more at risk from incurring tax debt than others, whether it is storing and filing receipts (“That’s not what your glovebox is for Mr. Tradie!") or filing on time - "but I'm just sooo busy!" The most at-risk for tax compliance though, is often the seasonal business - the beach front ice creamery in the Mount or the cherry orchard in Otago - how do you keep earning throu [...]

Tax Pooling – Jump on in!

Dealing with tax arrears isn't just about negotiating the debt accrued – it's about ensuring the right processes are in place to guarantee future compliance. For instance, I recommend all of my clients operate a GST savings account, whereby, every time you are paid, 15% goes straight into an untouched savings account, just waiting for GST time to be paid in full and on time. Income tax can be [...]

“AIM – Provisionally better.”

How often does provisional tax time roll around and you’re totally unprepared? In the world of tax debt management, after GST being used as cash flow, inability to account for or pay provisional income tax is the second most common way to fall behind in your tax obligations. Provisional tax is based on the income you made the year before, so, even if you are not making any profit this year – [...]

The right recipe for tax debt resolution.

The right recipe for tax debt resolution When you fall into the boiling pot that is tax arrears in NZ, IRD ensure that ‘paying it next month/when you can’ is an option that rarely works. Adding a pinch of heinous interest and a dash of penalties - both late filing and late payment – means that within just one month, your forgotten PAYE return could have increased by over $250. Imagine you [...]

Why fight to save a limited liability company – surely I’m protected?

Why fight to save a limited liability company - surely I'm protected? Many of my clients don't see the point in fighting to save a limited liability company, assuming that they'll lose any assets to the Liquidator but will be personally unaffected. Unfortunately, this isn't the case. There are two main areas of a liquidation that can, and often will, affect the shareholders and/or Directors perso [...]

I am a name, not a number!

I am a name, not a number! Two big results for Tax Debt Management in the last couple of weeks have reiterated that there is no time to address your tax arrears like the present. This month, M/s Consultant and Mr. Handyman received full write off of their debts, (over $200,000 in total,) under the hardship provisions, despite M/s Consultant working full time and Mr. Handyman having travelled over [...]

‘Budget’ is not a dirty word!

'Budget' is not a dirty word! Dealing with people in tax debt every day certainly keeps you appraised of various market trends and economic impacts on various industries. What can be surprising though, in this age of sky-high rents and technological progress, is that so few families seem to work to a budget anymore. Client A – let’s call her Jenny, is a successful contractor based in We [...]

Bonuses and benefits

Bonuses and benefits This is the time of year when many of us receive a bonus or, conversely, when we close down for several weeks – either way, change from a normal routine or income can affect the tax you pay – and therefore, can lead to unknown debt. When you get a lump sum payment or “extra pay”, it can affect the amount of tax you pay. It can also affect your ACC, KiwiSaver and stud [...]

Tax Arrears

Tax Arrears Many people love the idea of starting their own business, however, turning such a dream into a successful enterprise isn’t always smooth sailing. In fact, soon after starting a business, many new business owners realize that they are in over their heads. They see that there are a number of obstacles that need to be overcome, as well as knowledge that needs to be gained. Knowledge re [...]

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