Inland Revenue's focus for the coming year...

What you can do to get it right.

We can all list the usual things that our taxes pay for - roads, schools, hospitals and so on. But, as the devastating effects of the Christchurch earthquakes have reminded us, our taxes need to pay for much more.

In this article, Inland Revenue reveals its compliance plans for the year and discusses what you need to do to make sure you meet your tax obligations.

Inland Revenue is responsible for collecting and distributing revenue on behalf of the Government and the tax revenue we collect goes towards funding essential services that we all benefit from. While most individuals and businesses pay the right amount of tax, there are some who find it difficult to meet their obligations and a minority deliberately refuse to comply.

Every year we address areas that may be a risk to the government's revenue base. Our compliance focus document, Helping you get it right: Inland REvenue's compliance focus 2011 - 12 gives a detailed description of our compliance plans for the coming year. It also highlights what you can do if you think you've got it wrong.

We believe that raising awareness of the compliance issues we've identified will give you an opportunity to review your own situation and check that everything's in order. The document is available at www.ird.govt.nz/gettingitright

Aggressive tax planning, under-reporting of income and operating outside the tax system, fraud and identity theft are three key areas discussed in detail in the document. The compliance risks identified are prioritised based on evidence, research and analysis.

Additional funding received from Government in 2010 has enabled us to focus on the hidden economy, property and debt compliance areas over the next few years.This year, we are continuing to work with industries such as hospitality, scrap metal, fishing and aquaculture, tourism and agriculture as well as monitoring online trading and short-term property rentals.

We respond to the compliance risks with a range of approaches, such as working with tax agents, community groups and industry bodies, increasing our communications activities and advisory services, and where necessary, enforcement action.

What can you do?

The focus of our compliance document is about helping you get it right and this not only involves identifying the areas we're focussing on, but also giving guidance on what our customers can do if they think they may have got it wrong. Businesses who realise they've made a mistake should contact us as soon as possible. If you contact us before we start investigating, we may be able to significantly reduce any shortfall penalties.

Keep good records: Good record-keeping is essential to managing a business and ensures you have the right information if you're investigated for any reason. If you deal for the most part in cash, make sure you provide customers with receipts.

Voluntary disclosure: If you haven't been declaring your income, or you've found an error in your tax return, you can make a voluntary disclosure by completing the Voluntary disclosure (IR 281) form at www.ird.govt.nz (keyword: IR281). Once we receive this, it removes the risk of prosecution and reduces any penalties you may face.

Anonymous information: You can also report information about tax evasion and fraud to us anonymously through our website www.ird.govt.nz (keyword: anonymous) if you suspect someone isn't meeting their tax obligations.