How to lodge a late tax return
Have you missed one or several years of filing returns?
Before opening his practice, Gerard worked for many companies including chartered accounting firms, tax specialists, and also spent seven years at the Inland Revenue Department.
Eventually, unpaid taxes will catch up with you, regardless of whether you intentionally missed paying those taxes, or whether it was an accidental oversight. It is useful to know how to lodge a late tax return correctly. If you owe money to the Inland Revenue Department (IRD) and do not file your tax returns, they can issue a Default Assessment. This means that they will estimate what you owe and add on penalty charges for late payments as well as interest.
Voluntary Compliance and Late Filing Penalties
The system of taxation in New Zealand is based on voluntary compliance. This means it relies on its taxpayers meeting their IRD obligations under the tax laws voluntarily. This is done by filing tax returns before the due date to the IRD. Any taxpayer not doing so can be liable for penalties and interest.
Late Filing Penalties for late tax returns in New Zealand
A taxpayer is liable to pay a late filing penalty if they do not complete annual tax returns on time. If tax returns are not received, the Commissioner can impose penalties on the taxpayer.
Late with your taxes?
Call Gurpreet on 09 299 1000 for advice regarding filing tax returns!
Methods to Manage your Income Tax
There are systems in place to help you manage your income tax. One of these is the provisional tax system, which works by paying in installments throughout the year. If you have had to pay over $2,500 in income tax in the previous tax year, you are liable for paying provisional tax the following year. It is designed to be used by individuals, companies, and trusts. Taxpayers on this scheme are usually those with a self-employed income, a rental income, an income earned as a contractor, an income from a partnership or an income earned overseas.
Call 09 299 1000 for an appointment and let us help you to get sorted with IRD and filing late tax returns!
Managing your Provisional Tax
If you hand over your tax affairs to a tax accountant, all this will be done on your behalf. We recommend that you set sufficient money aside from the get-go, as the first installment will be due shortly after you have filed your tax return. We suggest that you open a separate bank account for your taxes and make regular deposits.