IRD amnesty about to expire

People who avoid income tax by paying themselves artificially low salaries through a company or trust have until 31 March 2013 to take advantage of an IRD amnesty. The amnesty was granted in the wake of the Supreme Court case of Penny and Hooper. In that case, two orthopedic surgeons paid themselves salaries that were a fraction of the actual earnings from their personal work. It amounted to tax avoidance.

If you are in a similar situation, making a voluntary disclosure to the IRD prior to 31 March 2013 means that you will avoid penalties and the IRD will only reassess two years. If you don’t make a voluntary disclosure you will face penalties (and these are likely to be at the higher end of the scale given the publicity about the case) and reassessment for four years (in some cases the IRD can reassess for an indefinite period of time).

If you’re not sure about your personal situation please make contact.