Increasingly we are seeing IRD targeting certain industries in an attempt to curb tax evasion. Recently we have seen them spend more time, money and resources into catching people who are evading tax.

One of the industries that the IRD are currently targeting is the construction sector. An increased volume of business within the construction industry (Auckland & Christchurch in particular) has increased the IRD focus around tax compliance. Clients in the construction sector may hear from IRD soon (if not already) regarding their obligation to declare all their income, including cash jobs – no matter how big or small – when they file their upcoming GST return and/or income tax returns.

As Chartered Accountants and an IRD approved tax agent, we have an important role to play in ensuring our clients are not committing tax crimes. The consequences of being caught can include tax penalties or criminal convictions that could even lead to imprisonment, which would have considerable impacts on one’s business and personal circumstances.

Some basic reminders for effective record keeping are; keeping receipts for all transactions, keeping records for 7 years, backing up electronic records (Xero is perfect for this), using separate bank accounts for personal and business transactions and recording wages/PAYE correctly (Smartpayroll is ideal for this).

If you are contacted by the IRD directly or require any advice with the above, please contact us as immediately.

Written by Hayden Ring