Voluntary Disclosure | Elite Accounting

Voluntary Disclosure

Majority of taxpayers comply with our self assessment based tax system and report correctly their true financial position. However mistakes can be made inadvertently and remain undiscovered for a sometime.

Weather you have made a mistake and omitted some income or expenses inadvertently or you may cut corners or not fully disclose your income to the IRD you can make a voluntary disclosure. A voluntary disclosure tells the IRD what is wrong with your tax returns before the IRD find it out themselves through an audit or review.

Anyone can make a voluntary disclosure - salary or wage earners, individuals, businesses, trusts and employers.

 

How does a voluntary disclosure help?

Often what may seem to be trivial omissions at first can collectively become a serious issue. The longer you leave your under-paid tax undeclared, the more likely you are to be caught out and the less favourably the IRD will look on your case.

 

You will also be hit with a number of penalties and interest charges, criminal prosecution, liquidation of you business and bankruptcy are on the cards as well depending on the seriousness of the case.

 

By doing a voluntary disclosure you are showing the IRD your willingness to put things right. According to the Standard Practice Statement 09/02a voluntary disclosure that is made under section 141G or section 141J of the Tax Administration Act 1994 is eligible for a shortfall penalty reduction provided;

 

A taxpayer can make a full voluntary disclosure either before the taxpayer is first notified that a tax audit is pending ("pre-notification disclosure"), or after the taxpayer is first notified of a pending audit but before the audit starts ("post-notification disclosure").

 

In Summary

It’s always better to set your tax matters straight before the IRD find out. It not only saves you money but will certainly save you a lot of sleepless nights. Speak with your financial advisor/accountant or contact us if you are in a situation which requires a voluntary disclosure or if you are not sure if you require a voluntary disclosure. Call us for a confidential discussion and we can advise you on the best course to take.

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