Do you operate a cafe, restaurant, or hotel?
Are you working as an employee in one of these businesses?
It is important to make sure you are paying your tax, because this year Inland Revenue is paying close attention to the hospitality industry.
If you are a business owner, or you receive a salary or wage, you need to pay tax on your income. We have many people working in hospitality industry dodging their tax obligations.
What are your obligations if you are in business?
Please record all your income and include it in your GST and Income Tax returns.
Avoid the temptation to pay expenses ‘out of the till’.
This approach may cause you to understate your income, leading to problems if our investigators carry out an audit of your business.
If you have staff, please record their details in your wage records and make PAYE and other required deductions (like Child Support or Student Loan Repayments) from the salary and wages you pay.
Remember to pay the deductions to Inland Revenue Department (IRD) by the due date.
Our investigators are on the lookout for businesses in your industry that pay wages ‘under the table’. Not only are these non-compliant businesses evading tax, they are also able to undercut the honest businesses that are paying the right amount of tax.
What are your obligations as an employee?
Firstly, you need an IRD number. You can obtain a number from our website.
Your employer should be deducting tax (PAYE) from your salary or wage every payday, enabling tax payment as you earn and avoiding a big bill at the end of the year. If you are being paid ‘under the table’ and you do not have a record with IRD, you will miss entitlements like Working for Families Tax Credits.
Own up, pay less
If you are a business owner or an employee and you think your taxes are not as up-to-date as they should be, I suggest you contact us and make a voluntary disclosure. Telling us about your overdue tax before an investigator contacts you will save you significant amounts of penalties and interest.
To find out more about our compliance focus, visit our website and enter the key word ‘compliance’. www.ird.govt.nz
If you are in business, you may like to attend one of our free tax seminars or workshops held throughout the country. To find one near you, visit our website and enter the search term ‘Seminars.’
Abdul Rafik is Inland Revenue’s Community Relationships Advisor based in Auckland. He is happy to answer readers’ queries, which should be sent to