IRD and undeclared cash jobs

Atul Mehta from Moore Stephens Markhams Chartered Accountants talks about the importance of declaring cash jobs with IRD and how to keep accurate business records. Download the article from June Contact magazine here.

Cracking down on undeclared cash jobs

The Inland Revenue Department (IRD) has recently published their new, rather tough, stance on undeclared cash jobs.  According to the IRD publication “It’s never too late to do the right thing”, it’s ok to do jobs for cash, or for your mates, as long as you record them and declare the income when filing your annual return.

To ensure you are abiding by the rules stated in this publication, it is important that you:

  • Record every job completed, no matter how big or small.
  • If you are registered for GST you must charge GST.
  • Declare all your income when you file your tax return.

If you have left some income off your tax return, it is best to let IRD know, rather than wait for them to find out when they do an audit. This can be done by making a full voluntary disclosure and you can work through this process with your business advisors.

You can make a voluntary disclosure:

  • by completing a Voluntary Disclosure (IR281) form
  • by contacting IRD via phone, letter, fax or email
  • by visiting an Inland Revenue office
  • during an interview with IRD.

The benefit of a voluntary disclosure is that you may be able to reduce the potential penalties you would eventually have to face. You may also mitigate the risk of being prosecuted in Court. If you do not declare past income and the Inland Revenue find out about this during an audit, it is likely that there will be substantial late payment penalties, shortfall penalties, and possible prosecution.

If you would like to discuss anything from this article with us, please get in touch.

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