Inland Revenue dobs in Auckland firm to credit ratings agencies over unpaid tax bill

By TOM PULLAR-STRECKER on Tuesday, 24 October 2017

Inland Revenue dobs in Auckland firm to credit ratings agencies over unpaid tax bill

The IRD doesn't have the power to warn the public, who can also end up out of pocket if firms with big tax debts go belly-up.

Inland Revenue has tipped off credit ratings agencies about an Auckland firm that has big tax debts, but won't reveal the identity of the company to the wider public.

The tax department was given new powers earlier this year to provide a heads-up to "approved agencies" of tax debts, in order to provide better protection for creditors.

However, the power does not extend to it also providing the same warning to the general public, who can also end up out of pocket if firms go belly-up.

Inland Revenue collections manager Stuart Duff said it was the first time the department had used the new powers.

The department had been approached by "many frustrated creditors" over the years, who were upset they had done business with companies, unaware that they had significant tax debts.

Duff said in a statement that the unnamed Auckland firm in question had "significant PAYE and GST debt but has chosen to ignore us despite being been given every chance to do the right thing.

"Now we have the ability to report the debt so fellow creditors can make informed decisions," he said.

The rules allow the department to pass on information about tax debts to ratings agencies once those debts exceed $150,000.

"Anyone running a check on a company will then be able to see these details," Duff said. Ad Feedback

The rules state Inland Revenue can't share information about debts if the tax debt is in dispute, or without first giving a warning it intends to share the information.

Duff said there were "more cases in the pipeline" where it was preparing to reports debts to ratings agencies which met the same criteria as the Auckland business.

"However, we hope businesses will make the appropriate effort to clear their tax debt so that we don't have to use this tactic more often," he said.

Spokesman Baden Campbell said Inland Revenue was restricted in who it could tip off.

"Section 85N of the Tax Administration Act was amended to make this change and restricts us to only disclose the information in this circumstance. Tax secrecy rules still apply in all other respects," he said.

Source: stuff.co.nz http://https://www.stuff.co.nz/business/industries/98168461/inland-revenue-dobs-in-auckland-firm-to-credit-ratings-agencies-over-unpaid-tax-bill

collection agencies IRD Section 85N of the Tax Administration Act tax debts. Tip off