Articles by Anthony Strevens
The IRD have recently announced ways in which they can provide some relief for those hit by the recent adverse weather events. Although these measures are not new, it is useful to know about them and to be aware the IRD will actively consider application to those affected.
Removing Penalties and Interest
The IRD charges penalties on late filing and late payments as well as interest on late payments. If you have been late in paying or filing a return due to the adverse weather, let the IRD know as soon as practical (or if you’re a GRA client then let us know and we’ll pass this on) and then they will consider removing any penalties as long as the tax is paid within a reasonable time. They will also consider removing interest charges up to 30 April 2023.
Instalment Payments
The ability to arrange an instalment payment plan is nothing new. However, it may be useful for those who’s income and cashflow have been adversely affected. Arranging this ahead of the due date will avoid penalties and, in conjunction with the above comments about interest, you might be able to avoid interest if the debt is repaid by the end of April.
Financial Hardship
If you’ve really been hit hard, the IRD has the discretion to write off not only penalties and interest but also some or all of the core tax owing. There is a much higher level of proof of hardship required for this and you should expect considerable scrutiny, but it can be a good option where there is no light at the end of the financial tunnel.
Note, this is not specific to the adverse weather events; it can be applied for in any hardship circumstance.
Provisional Tax
If you think your income will likely be lower for the 2023 tax year, then estimating your provisional tax downwards is an something you could consider.
Income Equalisation Scheme
For those who are in farming, agriculture, fishing, or forestry, you may be able to make a late deposit or early withdrawal of funds in the scheme outside of the usual timeframes if you have been affected.
Summary
Where the weather has impacted you, it’s important to let the IRD know as soon as possible – they are most likely to assist when you are upfront about the situation. If you have been affected, you should contact your Client Services Manager at GRA, or if you’re not a client, get in touch with us for a free initial meeting to discuss your options.
I found Matthew Gilligan’s Property 101 and Tax Structures 101 to be superb books for the following reasons: 1. They contain a wealth of information about property investing and related tax matters; 2. The commentary is very rounded and balanced; 3. They are filled with financially savvy practical tips and red flag warnings; and 4. The relatively informal style, use of short case studies and anecdotes to illustrate points, and the clarity of presentation make the books very reader friendly. The above combine to make two books that are educational, thought provoking and inspiring. I only wish I had access to this information much earlier. - Geoff W - April 2016
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