Tax Obligations
In a final warning to the construction industry, Inland Revenue (IRD) is urging businesses and sole traders to take responsibility for their tax obligations and avoid facing serious consequences.
Richard Philp from Inland Revenue stresses that if businesses comply with their tax duties, IRD will offer support. However, those who fail to comply will face follow-up actions, with no exceptions.
“Most businesses and individuals in New Zealand meet their tax obligations on time and in full. But there is a smaller group that consistently falls short,” says Philp.
“While we understand the challenges faced by the construction sector—such as rising costs of materials and labour shortages—there are still businesses that choose to avoid their tax responsibilities instead of dealing with them.”
Tax debt is particularly high in the construction industry, with underreporting of income, often through cash jobs, being a common issue. According to Inland Revenue, nearly 7,000 anonymous tip-offs about cash jobs are received each year across all sectors, with construction being the most frequently reported. This reflects a public perception that paying the correct amount of tax is the right thing to do.
Inland Revenue had a more lenient approach during the pandemic, but that’s changing. Last year, a campaign was launched to help construction businesses get on track with their tax obligations, and now, a stricter approach is being implemented.
“The message is simple: stop making excuses, reach out for help if needed, and don’t bury your head in the sand. Otherwise, you could find yourself facing our audit team or, even worse, facing legal action, as we’ve seen with several individuals in other sectors this year.”
Now is the final opportunity for those in the construction sector to get their tax matters in order and avoid serious repercussions.
In the past 6 months, Inland Revenue have sent emails and letters to 40,000 construction customers with overdue taxes or outstanding returns. Additionally, around 2,500 of those customers received a text offering support to resolve their outstanding tax issues.
Those who respond affirmatively will be contacted by a team of dedicated compliance officers.
Compliance officers will also conduct site visits in high-construction areas across New Zealand, and the audit team will select businesses for further investigation.
Tradies, The time to act is now—take care of your outstanding tax and returns before it’s too late!
If you’re a tradie or business owner in the construction sector, now is the time to act. Contact Cambridge Accountants without delay to ensure your taxes are in order. Our expert team can help you navigate your tax obligations, get your returns filed, and manage any outstanding debt before it becomes a serious problem.
Don’t risk the consequences—reach out to us today to get your tax matters sorted and avoid the risk of fines, penalties, or even legal action.
