Family Business ~ Insight | Nothing like Time, Interest and Penalties when it comes to Tax Bills

You may be aware that during May 14 the IRD went back to the High Court seeking a summary judgement against the accountant John Russell for a “blatant tax avoidance scheme” between the 1970’s to 2000. Russell was alleged to have set up an “elaborate, maze like structure of companies, partnerships and trusts” and provided advice on how others could avoid tax through their participation in the “Russell template”.

When audited the original tax bill under dispute was $5 million due to the IRD reassessing Russell’s personal income saying that he should have declared income of $15.76 million instead of the $298,700.

This case has been back and forth to the courts and the original amount of $5million has, as a result of this being over 25 years, inflated to a staggering $367 million of tax, interest and penalties. Russell has suggested a $1000-a-week proposal; at 79 one would think this is a good option to recover some of the funds outstanding, the alternative would be bankruptcy resulting in little or no recovery.

The case is still ongoing with both parties awaiting a summary judgement as requested by the IRD as well as Russell’s application for a judicial review.

The moral of the story is to sort out tax arrears at the time!

Family Business ~ Insight | Inland Revenue’s Annual Tax Statistics Available online….

You may well ask why in earth would I want to access or know about these BUT

The Inland Revenue for the past 5 years have responded to the request of many external users who want access to a range of data about tax revenue and social entitlements. This snap shot of statistics from both the IRD and the Court Statistics provides you with a visual picture of their customer’s world and hence the world you and I work in. Here you can see how trends are moving with the data, both in graphical and spreadsheet form, being provided between the years 2001 – 2013.

Did you know:
o there were 7,391,454 customers registered with the IRD as at 31st March 2013
o In the year to March 2013 11.9 million tax returns were processed
o In the year to June 2013 $53,771 million dollars of revenue was collected

So how could you use this data for you personally or your business….

Link to the Inland Revenue Annual Tax Statistics here