COVID-19 and tax returns: Difficulty paying tax? Donating trading stock?
24 August 2021
With GST, PAYE and provisional tax payment due dates pending, many businesses will be facing financial challenges in paying tax in full and on time due to the impacts of the latest COVID-19 Alert L4 lockdown.
Need help? Where to start…
Your BDO adviser can explain options available in the face of tax payment difficulties. For example, if cashflow is tight you may want to discuss which tax type you pay first. You might also want to discuss arranging instalments, or requesting remission of penalties and interest, along with other options facilitated by Inland Revenue outlined here. If necessary, your BDO adviser will contact Inland Revenue on behalf of your business – and this needs to be done as soon as practicable.
You must still file your returns
Filing of tax returns is very important and please remember we’re here to help. Businesses should be aware of their tax return obligations and Inland Revenue (Te Tare Taake) has reinforced the importance of filing on time. Please promptly contact your BDO adviser if you have any concerns regarding your ability to meet your tax return filing obligations.
Tax relief for donations of trading stock
Due to the lockdown, some businesses will have given away, or will be considering giving away trading stock (including perishable food or other goods). Here is a reminder about the special income tax rules which are in place to support these businesses. These temporary rules ensure that donations of trading stock to approved donee organisations and public authorities will qualify for an income tax deduction. Disposal of trading stock below market value to other non-associated organisations may also benefit from these rules.
Please get in touch with your local BDO adviser if you need assistance with your return. We will continue to update our BDO COVID-19 Business Support Hub with details of the Government’s business relief packages as these are announced.