This blog post was made and written by our panel of IRD Registered Chartered Accountants. Like this post? Please share with your fellow Kiwi so we can help them out!
Excuses & Mistakes For Late Payment
If you have ever been late to school or work, then you probably must've heard a ton of weird excuses for being late, and even made up some of your own ones. If you are running a business and have that one employee who is often late, they will undoubtedly have ran out of excuses at one point and came up with something so bizarre you don't know whether to get mad or laugh anymore.
The list below records eighteen of the most remarkable excuses used for failing to lodge their tax return on time with New Zealand's Inland Revenue.
☺ "The mailman stole it."
☺ "My ex-husband steals my mail."
☺ "I accidentally got on a plane."
☺ "The parrot ate the reminder letter."
☺ "My puppy got into the letterbox and ate it."
☺ "I need an extension because I am going to a wedding."
☺ "I can’t do it because I am helping someone else do theirs."
☺ "My wife earns more than me so I have to look after the kids."
☺ "My client can’t lodge because she is currently at the North Pole."
☺ "I just got divorced and my ex has all the files and our computer."
☺ "My mum died." (this was the second time the person used this excuse)
☺ "I didn’t know the due date." (from an employer for the past 20 years)
☺ "I broke my wrist six months ago and it has been a long road to recovery."
☺ "Snails eat our mail, so your lodgement demand letter must have been eaten."
☺ "I had a fight with my wife and she works for my tax agent so I couldn’t meet with him."
☺ "I had been driving for forty years when I fell asleep at the wheel and had an accident."
☺ "My mailbox is full of grass and weeds so I didn’t receive any IRD correspondence or reminder letters."
☺ "I couldn’t lodge my 2003 tax return because I was suffering from pre-trauma from a serious car accident I had in 2007."
Now you be the judge of whether these reasons are viable or not. But whatever the reason may be for these verbal and written excuses, they are undeniably ridiculous and funny!
Common Mistakes Causing Tax Penalties For Kiwis
On a more serious note, mistakes are bound to happen when running a business alone and Inland Revenue's penalties can range from 20% up to a colossal 150%. In most cases, these penalties cannot be remitted, hence, we encourage you to get a knowledgeable tax advisor or chartered accountant.
That being said, we happen to have a good record of avoiding penalties!
Here are some of the common errors we've found with clients while calculating and filing their taxes.
☒ Logbooks for motor vehicles are either not kept, or are not as per IRD's protocol.
☒ Followed Australia's Fringe Benefit Tax requirements rather than New Zealand's — they are different.
☒ Stocktake is not done. Unlike Australian tax law, New Zealand requires an annual stocktake for almost all business types.
☒ Did not physically write off bad debts before the end of the tax year.
☒ Did not deduct tax on schedular payments from contractors, unless the said contractor is operating as a company or have IRD's certificate of exemption.
☒ Did not deduct resident withholding tax on interest when paying interest of $5,000 or more per annum to a non-financial institution/individual, unless they have IRD's certificate of exemption.
Talk to us immediately if any of these scenarios apply to you.
Infographic for "Common Mistakes Causing Tax Penalties For Kiwis"
“We got great suggestions on how to get the most from our tax savings. I'm glad we made the decision to go with Accounting4Me.”Hannah
Auckland, New Zealand