Inland Revenue is cracking down specific industries to search for overclaimed expenditure or undeclared revenue. The construction industry is expected to be next on the list. The likely target would be cashies undertaken by some tradies, home office claims, motor vehicle expenses, entertainment and gross margins or income minus expenses.
The Outside team has an extensive knowledge in the construction industry across all trades. We make sure our clients maximise all deductions available to them without attracting the ire of the IRD. We encourage tradies and trade business owners to make sure their record-keeping is always up to date and that they record every job and material used. They should also advise their accountants of any cash jobs they’ve undertaken by the end of the financial year.
If you are a tradie or work in the construction industry, we encourage you to get your tax obligations right from the start especially if you undertake cash transactions. All jobs must be recorded, regardless of how big or small it is. Make sure your register as an employer if you’re employing staff and register for GST when your annual turnover goes more than $60,000 and charge it if already registered! If you do, completing your tax returns will be just a breeze!
The IRD can be pretty tricky when it comes to random audits! Cash jobs can be tracked. Sometimes, tradies work together but one doesn’t declare a job that can be dobbed in. Once a person is audited, another contractor or business might need auditing next. The IRD can see when tradies purchase supplies such as timber, carpet or paint but declare no corresponding job. They can also access information from Government departments, banks and other organisations to check if all income is declared. Doing cashies is legal– you just have to sing it out on our tax return!
If in the past you’ve left some income off your annual tax return, it’s better to beat the IRD to it by making full voluntary disclosure before they find out. Your penalty could even be reduced by 100%, avoid prosecution and even retain good business reputation if you do so. It’s never too late to do it right! Let us know if you need some help and we would do our best to assist you. The Government supports the sector through Covid-19 with initiatives such as the Small Business Cashflow Scheme, Wage Subsidy and Working for Families. If you don’t pay full taxes by not declaring cashies, it might hurt our economy!
Our Business Clients
Cam recently caught up with Grant Douglas, owner of Makers Fabrication, to get his perspective on a few things. If you want to chew the fat with Grant further – get in touch and we’ll set it up.
Besides being pretty all-round top blokes, Matt and AJ are bloody screwed on when it comes to growing their business and smashing their goals.
Flick us an email or give us a buzz!
Address: Level 2, 182 Vivian Street,
Te Aro, Wellington 6011 New Zealand
Mail: PO Box 24-457, Wellington 6142
Phone: 04 889 2975
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