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.
So, how can you avoid falling into the PAYE trap – apart from having wonderful cash flow and a great
payroll system?
One option is contractors, rather than employees. Contractors can fill temporary or limited
contracts, so you only employ people when the need is there.
Contractors are also responsible for their own tax and other additions such as ACC levies or
Kiwisaver.
– don’t get annual leave or sick leave
– can’t bring personal grievances
– pay their own tax
Also, your business does not:
– hold contractor’s records — but it does for employees
– give contractors employment agreements
If you are uncertain about employing staff but need assistance, employing a contractor is a good way
to ensure you avoid the pitfalls of PAYE.
Not passing PAYE on to IRD affects everyone in the country so, if you have worries – find an
alternative that suits. If you have already been affected by PAYE debt, don’t panic – we can help.
Just call 0800 829 277 and ask for Rosie, today.