IR says business owners with multiple properties were being encouraged to tap into those resources to meet their bills. Photo: RNZ
Inland Revenue has stepped up its audit activity, and within six months found $300 million in tax that should have been paid by fewer than 10 companies alone.
It said it had conducted 3600 audits in the first half of the financial year, 50 percent more than the same time last year.
In that process, it found $600 million of tax that should have been declared.
Half of that came from fewer than 10 audits.
"The systems Inland Revenue now uses also screened more than three million returns, leading to reviews of 30,000 of those returns. The audits, screening and voluntary disclosures added $859m to tax revenue," said IR's segment lead for significant enterprises Tony Morris.
He said business owners who had multiple properties were being encouraged to tap into those resources to meet their bills.
"We've been in touch with 200 business owners and told them we know they have multiple properties - some in a company name, some in trusts, some personally. We believe they should be able to refinance to pay their debts to us and told them so.
"If they chose not to, we've been clear that our approach to their debt will escalate.
"These 200 people had $14 million of debt between them, but within a month more than $10 million had been paid or put under arrangement."
From September to December last year, 164 companies were liquidated by the courts on application by Inland Revenue - an increase of 84 percent over the same period in 2023. Inland Revenue wrote off $83.9m related to completed liquidations.
Keaton Pronk, from insolvency firm McDonald Vague, said IR was a creditor in most liquidations, and GST was a frequent factor, as well as other tax and Covid loans.
"IRD has a huge amount of tax debt on books need to recover. They don't really have a choice how they go about doing it - that's why we've seen a huge jump this year alone in IR pursuing liquidation applications.
"Usually they are responsible for 60 percent of applications that go through court but at the moment it's close to 70 percent. They're pushing hard at the moment through all tax types."
There were seven completed prosecutions for tax evasion in the quarter.
IR is also targeting sectors where it believes "cash jobs" are more prevalent.
"We have opened audit cases in the construction sector with a current value of $2.3m of discrepancies in tax assessed. A new selection of cases is now focusing on plasterers and painters," Morris said.
"We made 320 unannounced visits to independent liquor stores and around 450 vape stores."
IR said it was making progress on collecting child support payments.
"For the first time in 20 years, child support debt dropped to under $1b. The primary reason for that is IR's ability to deduct payments through the PAYE system."
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