cheap lenses australia

In an increasingly complex tax world, how do you stay out of trouble?

Tax headlines recently have reflected lengthy tax disputes, many which have been lost by the taxpayer. Inland Revenue has increased its focus on tax audits and this can leave many companies feeling nervous about their practices. Are you next?

The complexities of the New Zealand Taxation system

Taxation is an area that many businesses struggle with and it is crucial that accountants get this right. Inland Revenue regulations make it difficult to request that tax positions be changed once a tax return has been filed. Inland Revenue does not take practical errors in returns and poor advice lightly. Once an accountant has exposed themselves to this, they may find themselves on the Inland Revenue “hit list” for future audits.

There is a provision in the May 2010 Budget for an additional $120 million in funding tax audits and compliance activity over the next four years; a clear directive to the accounting community that we need to be getting tax right the first time. While the New Zealand taxation system is continuously changing and evolving, the underlying principles and concepts that provide its foundation have remained the same.

What does this mean for the taxation sector?

Chartered accountancy firms need to ensure that all staff have the proper skills and training for their position. A poorly trained accountant can potentially taint the firm’s reputation and expose the firm and their clients to unwanted contingent liabilities.

Staff need more than just a good theoretical understanding of taxation from tertiary study. This knowledge needs to be backed up by training in the practical knowledge and application of the subject matter. Without knowing the “nuts and bolts” of practical tax, accountants can become a liability to themselves, their colleagues and their employers.

What can you do for your company?

It is in our nature as accounting professionals to focus on being accurate and precise and this means that we can resort very quickly to the technical aspects of our task. While this is important, it is also essential that we extend our focus to cover the practical application and understanding of tax basics. If people focus on the understanding of core tax principles and concepts, the technical proficiency will follow.

Accountants have a responsibility to the profession to continue with professional development; gaining knowledge, improving ethical and practical judgement and continuously improving on technical expertise. This is only possible if knowledge has already been obtained on the practical basics.

It is crucial that accountants and their support staff are fully equipped with the necessary skills, practical knowledge and understanding of New Zealand Taxation. So, how are you going to stay out of trouble?

One Response

Carol on October 1, 2010 at 6:17 pm

Daniel, I think many of your comments are valid and it is important that staff are trainer with all the necessary skills. CAs should keep up to date with the latest information available to them to offer the best advice to their clients. I have checked out your website (www.taxtraining.co.nz) and believe the courses you offer will be rather useful to many – not only the CAs but to business owners in NZ also.

Write a Comment

Take a moment to comment and tell us what you think. Some basic HTML is allowed for formatting.

*

Recent comments

  • Peter: When you have more than one job all your income is added up and you pay tax on the total income amount. For...
  • Joanne Martin: Hi Would you be able to email me to discuss a small company that is an LTC which I need some advice on...
  • Rizwana Saheed: You are on the right track that there is an exemption when employees work overtime but whether or not...
  • bryan: as a group of employees we get paid meal money if we exceed 11hrs on any day. Employer says he wants to tax...
  • linda: My mother is 94 and has dementia. With govt assisted carers she is still living in a home gifted within the...
  • Sharon: Hi Daniel, Can you please advise how owners of a profit-making LTC pay themselves? The owners used to pay...
  • Another Anne: My Dad is in care on full subsidy. I am EPOA. Are we able to gift some money to my brother in UK so...
  • Twagilayesu Isaya: I agree with the author of this article that Inland Revenue Department need to provide clear...
  • Quinn: Hi. I would like some clarification regarding the valuation of the investments component of the owners basis...
  • QROPS Pensions: Interesting piece of writing, you always write the most useful content & TalkTax is no exception...

Upcoming Events

  • No events.

Poll

In the past 12 months, do you think the amount of IRD investigations being undertaken has?

View Results

Loading ... Loading ...

Authors

    For the moment, we have no authors