Date: 12th February 2020
Hospitality businesses have been in Inland Revenue’s spotlight recently. In late 2019, IRD personnel searched several Central Otago businesses and made unannounced visits to others, as part of its current hidden economy campaign targeting the hospitality sector.
But it doesn’t end there, Inland Revenue has been in touch with us to say that hospitality businesses may be visited or closely reviewed again this year.
Inland Revenue announced: “We’ll be contacting your client(s) in the hospitality industry to thank them if they’ve been keeping their books in order. As you know, helping your clients keep their books in good order assists with their tax obligations and provides them a more accurate view of cash flow, allows greater access to finances and ensures their businesses are correctly valued. We’ll also be encouraging your client(s) to put their records right if they’ve left anything off their past tax returns.
“We may also visit your client(s) in the hospitality industry. We want to ensure hospitality business owners know they need to show transactions through electronic trading and mobile payment apps.”
Keeping good books not only means you’re complying with the law, it’s also good for your business. Accurate bookkeeping makes it easier to see what’s going on in your business, to get a loan, and to keep track of your tax records. It also means your business will be worth more if you decide to sell.
Inland Revenue has ways of detecting the signs of businesses that aren’t following the rules. If business owners are under-reporting sales, paying under-the-table wages, or under-paying GST, they can find out. They have warned that they we will prosecute in these situations.
Most business owners are trying to do the right thing but if you realise you’ve left something off your past tax returns, we encourage you to contact us so you can help you make a full voluntary disclosure.
Fortunately, with help from your accountant and cloud accounting software, it’s easy to keep on top of compliance.
Please get in touch if you need help to get it right.