As a business owner, how should I deal with the IRD in times of trouble?

Published by Vanessa Crosby on June 07, 2011

The Inland Revenue Department is a significant stakeholder in any business. Many business owners forget this and frequently give the IRD low priority in respect of filing returns, making payments and communication.

In fact, by law the IRD has preferential status in relation to various taxes including outstanding GST and PAYE. In other words, they get paid first out of any funds that may be recovered. They are often a significant creditor and have a wide range of powers available to them to protect their position. Frequently, when businesses get in to trouble, the first person they ignore is the tax man. Be warned, this can and will trigger action.

The IRD have the ability to reduce or in fact waive penalties in certain cases. Whether they will exercise this discretion depends on a number of factors, including the tax payer’s record with the IRD and if a payment scheme is in place, whether the payments have been made as agreed. It is in your interests to keep the IRD informed and to meet your obligations to them, as and when agreed, if at all possible.

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