Academy Chartered Accountants Limited
Chartered Accountant
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Accounting Services

Taxation

Paying what you owe

Let's face it - many businesses get accountants to do accounts for one main reason - to pay their taxes. We think there's a lot more than that about accounting - but the fact is that's what drives many taxpayers to have accounts done. So one of our key roles is to ensure you do this properly - and stay away from trouble.

We don't always agree with IRD

We're NOT employed by IRD, and we don't always agree with them on everything they do. Our professional institute deals with them on principles to try and ensure tax obligations are fair and reasonable. We deal with them on specific issues. But even so it can be a considerable burden when we disagree. And they can always change the law. This happened for example when some of us challenged their interpretation of a particular area of tax. We won - and many Kiwis got refunds - but today we all pay the extra tax (since reduced on other grounds) because the government changed the law.

Effective tax arrangements for you

Our role is to help business owners find and implement effective tax arrangements for their businesses. Our philosophy is to ensure taxpayers pay as little as legally possible while stay away from troublesome areas (many of which have been tackled by IRD even in the time this article has been up). If you're looking for help with problem areas where you might have dug a hole for yourselves, we're not the most aggressive Kiwi tax accountants to see. We're having discussions at the moment with IRD over an area of tax that has become an issue because of changes in another area. This is so fundamental it cannot be ignored - and the law needs changing - and it seems in the meantime IRD is turning a blind eye. But it is a rare case where we believe the law is so fundamentally flawed we have to tackle it ourselves. We've taken a similar stance before - but the last time this happened was quite a long time ago, and eventually the government changed the law under challenge.

Compliance with the law

By and large we help taxpayers understand and comply with the law. We'd rather spend time helping them make more money (and so paying more tax) than spending lots of effort on finding ways round it. The cases where some of the bank's arrangements have come unstuck on challenge by IRD show the danger of trying to be too smart. Naturally you should take advantage of the breaks they offer - but we recommend avoiding arrangements that could be seen as tax evasion.

Tax calculations and when to pay

There are generally two aspects to tax - how much and when. While we encourage people to be in charge of their own accounts, as good business practice suggests, when it comes to tax, we take a more active role. First we calculate your tax position. This can be complicated in some cases - for example student loan repayments and family support. But once this is done, we then tell you what is due when.

Payment arrangments when necessary

If you're not going to be able to make these payments on the due date, we suggest you talk to us before that date. We can usually negotiate a repayment schedule - and IRD usually remits penalties on these. But only if the arrangement is in place before the due date - and only if you stick to it. Alternatively there are legal ways to transfer tax from overpayers, thus helping both parties.

Other taxes

Accountants don't just deal with income tax. There's also PAYE, GST and FBT. These are generally your responsibility (although if FBT relates solely to shareholder employees, then this can usually be done as part of processing your tax, and of course for GST returns we do via BankLink then we are responsible - but not for the payment). Also we don't deal with payroll on clients' behalf - although we can still advise on it - we used to be specialists in this area. However, if you are affected by these areas, we will help you with them.

So read on -


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