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An Auckland plumber who declared less than NZ$1000 in income over five years has lost nearly NZ$5 million worth of property following an investigation into his tax affairs, prompting an announcement for tradespeople to be wary of their tax obligations as IRD and NZ police aim to engage in greater collaboration on fraud cases.
Yu Ping Gong and his company earned $2.1m in that time, according to the police, who claimed the undeclared income paid for a property portfolio worth more than $9m. He denied tax evasion but agreed six of the eight Auckland properties, worth $4.9m, can be sold in a deal cut with the police.
An outstanding tax bill of $1.2m will be paid to Inland Revenue as Gong wishes to "regulate his tax affairs", according to Justice Edwin Wylie in his judgment which approved the settlement.
Stuart Nash, the NZ minister responsible for police and revenue, indicated he would seek greater collaboration between the agencies on these types of cases. While the IRD and the police can work together under the current laws, Nash said work was being done to strengthen the information-sharing agreements.
"This is the hidden economy. It's not fair to the vast majority of tradies who pay taxes and get undercut by the competition doing cash jobs."
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To learn more about the range of accounting, tax, and financial services for trades businesses across New Zealand, visit www.tradesaccountants.co.nz today or call the team at TradesAccountants on 0800 237 6825 to receive down-to-earth accounting and business advice that every Kiwi tradie deserves.