You may have heard or read about the well publicised tax case of two Christchurch surgeons Penny & Hooper who used company structures and family trusts to artificially lower their salaries to avoid a higher personal income tax rate.

The Supreme Court sided with the Inland Revenue when it ruled that “income derived from personal exertion should belong in its appropriate taxation band and should not be inappropriately diverted away”.

Inland Revenue concession to make a voluntary disclosure granted after the outcome of the Penny and Hooper case runs out at the end of this month.

Those who make a voluntary disclosure before 31 March 2013 would be required to make adjustments for only the last two income years.

Those who did not come forward might incur not only penalties, but Inland Revenue might also reassess their tax position over four years.

Advisory Accountants have developed our Shareholder Remuneration Kit for our clients, and a procedure to help you by assessing the risk that the Inland Revenue will disagree with the tax positions taken.

Please urgently arrange a meeting with me, so that we could assess the risk and advise whether we need to do a voluntary disclosure to Inland Revenue.

Should you require any further information, please let me know.

A tip from Advisory Accountants : Changing circumstances in your business and in New Zealand tax laws mean that you may not be legitimately claiming everything you are entitled to.

As a valued Advisory Accountants  client we would like to explore with you all options specific to your business that have a bearing on how much tax you are paying.

Overpaying tax doesn’t make sense

The Director of Accountants First has prepared a special program to this end and would like to go over it with you to explain the various legal tax opportunities available.

Call Advisory Accountants to arrange a meeting at a convenient time to check that you are currently claiming all the expenses you are entitled to.

• 2011 Budget changes
• Kiwisaver
• Working for Families
• student loans,
• PIEs.

Schedular payments (aka Withholding tax deduction) are made to contractors who perform activities outlined in Schedule 4 of the Income Tax Act 2007.

You’ll find more information on the IRD website, under headings such as:

• Taxing activities called schedular payments (formerly withholding payments)
• Certificates of exemption from withholding tax (IR331)
• Tax on schedular payments (formerly withholding payments)

Death and taxes may be inevitable, but they shouldn’t be related.  
- J.C. Watts, Jr.

Watts served in the U.S. House of Representatives from 1995 to 2003 as a Republican, representing the 4th congressional district in south-central Oklahoma. After leaving Congress he established a lobbying and consulting firm, served on corporate boards, and worked as a political commentator.

Wrong!

Knowing about tax planning is important,regardless of income level. In fact, some would argue that the tax bite hits hardest on those who are least able to afford it.
(Sibbald,2005)

GST is due today. If you have yet to complete your GST please do or pass this on to your accountant.

IRD does charge a penalty for late filing but on top of that they also charge interest
and non payment penalties.