What You Need to Know about Tax Debt and the IRD
Tax compliance can be costly and time-consuming. It is easy to fall behind. Once you are in the spiral of tax debt, with interest and penalties mounting, finding your way out again can feel like a nightmare. Call our tax debt consultants today – we can deal with the IRD for you.
Understanding the New Zealand Tax System
The New Zealand tax system is full of jargon — IRD, GST, PAYE, FBT provisional tax and terminal tax, to name just a few. Tax debt arrears will happen when you get behind on any of your tax bills. The IRD will quickly start charging interest and late payment penalties on overdue taxes. The interest and penalties on overdue taxes are very high and are designed to ensure that you cannot invest money elsewhere and receive a better return. There are some taxes that are ‘special’, like PAYE. Not paying this to the IRD can be a criminal offence, so it is important that businesses stay on top of their tax obligations.
Tax Debt Interest and Penalties
Interest and penalties automatically apply to unpaid taxes. The penalties change, depending on the tax type, starting at 1% each month your tax payment is late. The current interest rate is 9.21% p.a. which accrues on a daily basis and is compounding (interest accrues on unpaid interest). Combine these and it’s easy to see how tax debt can spiral out of control so quickly. When you engage us, we are able to stop the IRD applying penalties straight away.
Tax Relief Options
The IRD’s job is to collect as much tax as possible for the Government and what better way to do that than to help New Zealand businesses keep generating profits? Here at Tax Debt Sorted, we use our unique knowledge of the tax laws and IRD policy to work with the IRD and New Zealand business owners to manage their tax debts. Most of the time this means we can generate a WIN:WIN outcome. The tax laws and IRD policy provide a variety of options to help you – ranging from allowing you to pay your tax bill in installments, to a partial or full write-off. The tax debt options available to you depend on your situation, and we can help you achieve the best outcome.
Powers of the IRD
The IRD must ‘maximise recovery’, and they have a number of ‘powers’ at their disposal to recover tax debt. These powers include deducting money from your bank accounts or your pay, stopping you from leaving the country, freezing your assets, liquidating your business or bankrupting you.
The IRD are less likely to use forcible means of tax debt recovery if we start negotiating with them: give our tax debt negotiators a call today and we will deal with the IRD on your behalf.
STOP FURTHER PENALTIES OCCURING
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