Latest news with #RobynWalker
1News
2 days ago
- Business
- 1News
Businesses' unpaid tax bill: 'Potential for a lot of collateral damage'
New Zealand businesses owe more than $1.4 billion in unpaid GST and PAYE from the 2025 tax year, in what commentators say is a sign of the stress many parts of the economy are still under. Inland Revenue has provided a breakdown of PAYE and GST still unpaid for the tax years 2018 through to 2025. There is still almost $48 million unpaid from 2018 - and $1.471 billion from the most recent year. Of 2025's number, $432.9m relates to employer activities and $1.047b to GST. Just over $66m of the debt was from businesses or individuals who were bankrupt or in liquidation. ADVERTISEMENT Businesses collect GST on their sales and then send it to Inland Revenue when they file their GST returns. Deloitte partner Allan Bullot had earlier warned that GST debt could be creating a wave of zombie companies. Construction had the largest share of unpaid PAYE and GST, with a total of almost $1b over the tax years from 2018 through 2025. The morning's headlines in 90 seconds, new report into submersible implosion, body found in Auckland park, and mixed injury news for the Warriors. (Source: 1News) Rental, hiring and real estate services was next with $533.5m. On a measure of debt per thousand enterprises, electricity, gas, water and waste companies had the largest unpaid amount in the most recent tax year. Robyn Walker, a tax partner at Deloitte, said Inland Revenue had been given a clear message to collect more of the money it was owed. ADVERTISEMENT The number of businesses being liquidated by Inland Revenue has jumped in recent years. Walker said the data could indicate that other creditors to those businesses were in a precarious position. If a business failed, Inland Revenue would be the first to be paid, which could reduce a business' ability to pay anyone else it owed. "People could be choosing to pay other business suppliers first - but they maybe aren't paying anybody... there's potential for a lot of collateral damage if Inland Revenue is allowing tax debt to accumulate." She said people who were not able to pay GST and PAYE should contact their accountant top make sure they still had a viable business. If a business had hired staff on the expectation it could pay them a certain amount before tax, and it turned out that they could not afford the PAYE component, there was probably a bigger issue at play, she said. "The business may not be viable or may need help in a more substantive way." ADVERTISEMENT SImplicity chief economist Shamubeel Eaqub said the data highlighted the distress many businesses were facing. "Some businesses - not many - think it's okay not to meet their responsibilities. "PAYE and GST are only collected on behalf of New Zealanders, it's not your revenue.... there's a risk to other creditors." He said businesses with tax debt were quite often not viable and owners could be breaching their directors' duties. "It can mean big problems, that's why the IRD has been so active... it's the right thing to do." The data showed Inland Revenue had written off $110.3 million of unpaid PAYE and GST in 2018, $109.1m in 2019, $85.5 m in 2020, $94.8m in 2021, in 2022, $99.3m in 2023, $56m in 2024 and $7.6m from the last tax year.
NZ Herald
3 days ago
- Business
- NZ Herald
NZ businesses owe $1.4b in unpaid GST and PAYE for 2025 tax year
Just over $66m of the debt was from businesses or individuals who were bankrupt or in liquidation. Businesses collect GST on their sales and then send it to Inland Revenue when they file their GST returns. Deloitte partner Allan Bullot had earlier warned that GST debt could be creating a wave of zombie companies. Construction had the largest share of unpaid PAYE and GST, with a total of almost $1b over the tax years from 2018 through 2025. Rental, hiring and real estate services was next with $533.5m. On a measure of debt per thousand enterprises, electricity, gas, water and waste companies had the largest unpaid amount in the most recent tax year. Robyn Walker, a tax partner at Deloitte, said Inland Revenue had been given a clear message to collect more of the money it was owed. The number of businesses being liquidated by Inland Revenue has jumped in recent years. Walker said the data could indicate that other creditors to those businesses were in a precarious position. If a business failed, Inland Revenue would be the first to be paid, which could reduce a business' ability to pay anyone else it owed. 'People could be choosing to pay other business suppliers first - but they maybe aren't paying anybody... there's potential for a lot of collateral damage if Inland Revenue is allowing tax debt to accumulate.' She said people who were not able to pay GST and PAYE should contact their accountant to make sure they still had a viable business. If a business had hired staff on the expectation it could pay them a certain amount before tax, and it turned out that they could not afford the PAYE component, there was probably a bigger issue at play, she said. 'The business may not be viable or may need help in a more substantive way.' Simplicity chief economist Shamubeel Eaqub said the data highlighted the distress many businesses were facing. 'Some businesses - not many - think it's okay not to meet their responsibilities. 'PAYE and GST are only collected on behalf of New Zealanders, it's not your revenue.... there's a risk to other creditors.' He said businesses with tax debt were quite often not viable and owners could be breaching their directors' duties. 'It can mean big problems, that's why the IRD has been so active... it's the right thing to do.' The data showed Inland Revenue had written off $110.3 million of unpaid PAYE and GST in 2018, $109.1m in 2019, $85.5m in 2020, $94.8m in 2021, in 2022, $99.3m in 2023, $56m in 2024 and $7.6m from the last tax year.
RNZ News
3 days ago
- Business
- RNZ News
Businesses' unpaid tax bill - 'there's potential for a lot of collateral damage'
Commentators say it is a sign of the stress many parts of the economy is under. (File photo) Photo: 123RF New Zealand businesses owe more than $1.4 billion in unpaid GST and PAYE from the 2025 tax year, in what commentators say is a sign of the stress many parts of the economy are still under. Inland Revenue has provided a breakdown of PAYE and GST still unpaid for the tax years 2018 through to 2025. There is still almost $48 million unpaid from 2018 - and $1.471 billion from the most recent year. Of 2025's number, $432.9m relates to employer activities and $1.047b to GST. Just over $66m of the debt was from businesses or individuals who were bankrupt or in liquidation. Businesses collect GST on their sales and then send it to Inland Revenue when they file their GST returns. Deloitte partner Allan Bullot had earlier warned that GST debt could be [ creating a wave of zombie companies. Construction had the largest share of unpaid PAYE and GST, with a total of almost $1b over the tax years from 2018 through 2025. Rental, hiring and real estate services was next with $533.5m. On a measure of debt per thousand enterprises, electricity, gas, water and waste companies had the largest unpaid amount in the most recent tax year. Robyn Walker, a tax partner at Deloitte, said Inland Revenue had been given a clear message to collect more of the money it was owed. The number of businesses being liquidated by Inland Revenue has jumped in recent years . Walker said the data could indicate that other creditors to those businesses were in a precarious position. If a business failed, Inland Revenue would be the first to be paid, which could reduce a business' s ability to pay anyone else it owed. "People could be choosing to pay other business suppliers first - but they maybe aren't paying anybody... there's potential for a lot of collateral damage if Inland Revenue is allowing tax debt to accumulate." She said people who were not able to pay GST and PAYE should contact their accountant top make sure they still had a viable business. If a business had hired staff on the expectation it could pay them a certain amount before tax, and it turned out that they could not afford the PAYE component, there was probably a bigger issue at play, she said. "The business may not be viable or may need help in a more substantive way." SImplicity chief economist Shamubeel Eaqub said the data highlighted the distress many businesses were facing. "Some businesses - not many - think it's okay not to meet their responsibilities. "PAYE and GST are only collected on behalf of New Zealanders, it's not your revenue.... there's a risk to other creditors." He said businesses with tax debt were quite often not viable and owners could be breaching their directors' duties. "It can mean big problems, that's why the IRD has been so active... it's the right thing to do." The data showed Inland Revenue had written off $110.3 million of unpaid PAYE and GST in 2018, $109.1m in 2019, $85.5 m in 2020, $94.8m in 2021, in 2022, $99.3m in 2023, $56m in 2024 and $7.6m from the last tax year. Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
NZ Herald
22-05-2025
- Business
- NZ Herald
Budget 2025: Depreciation on the rise in positive change for businesses
This article was prepared by Robyn Walker for Deloitte and is being published by the New Zealand Herald as advertorial. Budget 2025 has given businesses a welcome boost to tax deductions for investing in assets. While speculation has been rife in the last week that the Budget would include full expensing of assets, for many the idea of such a change was absurd due to the corresponding fiscal cost. With an estimated annual cost of $1.7 billion, Budget 2025 has delivered on depreciation changes, not as generously as some would have liked, but more generously than many would have predicted. What is proposed: Investment boost Effective immediately, businesses will be able to deduct 20% upfront of the cost of any new assets (or improvement to existing assets). The balance of the asset cost will continue to be depreciable (if depreciation deductions apply). While commercial buildings remain non-depreciable, they will be eligible for the 20% investment boost. Urgent Budget legislation in the form of the Taxation (Budget Measures) Bill (No 2) ('the Tax Bill') will be quickly enacted to give businesses the certainty they need about what is or isn't eligible. The Government estimates that increased investment in assets will lift GDP by 1% and lift wages by 1.5% over the next 20 years. It is understood officials advised the Minister of Finance a 20% expensing regime was the most optimal solution to boost investment. What is eligible Investment Boost will apply to most new assets that are depreciable for tax purposes; it will also apply to commercial buildings. Critically, the assets must be new, or new to New Zealand; second-hand assets will not qualify. In the year an asset is acquired, 20% can be claimed upfront and depreciation can be claimed on the balance. For example, if an asset costing $100,000 with a 10% depreciation rate is acquired on the first day of the tax year, an immediate deduction is available for $20,000, and a depreciation deduction of $8000 (being 10% of $80,000). This gives total deductions in year one of $28,000, as compared with $10,000 under existing rules. What isn't eligible More detail will be included with the Tax Bill commentary, but it's anticipated certain assets will be ineligible: · Assets that have been previously used in New Zealand · Land (but land improvements will be eligible) · Trading stock · Residential buildings (there will be exceptions for hotels, hospitals and rest homes) · Fixed-life intangible assets (such as patents) · Assets that are expensed under other rules (for example, low value assets below $1000) Other important details · The new rule will be optional; · There are no limitations on who can use the rules, it applies to businesses of all sizes, and assets of any value; · The rules will apply to assets which were first used or available for use on or after May 22, 2025. This will create some boundary issues for businesses who were in the process of purchasing or constructing assets to understand when something is eligible. This should be made clear in the Tax Bill commentary. · Capital improvements of existing assets (for example, seismic strengthening of buildings) should be eligible. · Depreciation recovery rules will apply to claw back the Investment Boost deduction if an asset is sold for more than its book value. · The rules will also apply to assets which have deductions under separate taxation regimes which are akin to depreciation. This includes improvements to farm and forestry land (such as fencing), planting of listed horticultural plants, improvements to aquacultural businesses, and certain kinds of petroleum development expenditure and mineral mining development expenditure. · The Investment Boost deduction can be included in R&D tax incentive calculations. Overall, this is a really positive change for businesses.
Scoop
22-05-2025
- Business
- Scoop
Government Budget 2025: Depreciation On The Rise In Positive Change For Businesses
Budget 2025 has given businesses a welcome boost to tax deductions for investing in assets. Speculation had been rife in the last week that the Budget would include full expensing of assets, however some had questioned the corresponding fiscal cost of such a move, says Deloitte Partner Robyn Walker. 'With an estimated annual cost of $1.7 billion, Budget 2025 has delivered on depreciation changes, not as generously as some would have liked, but more generously than many would have predicted,' Walker said. 'Overall, this is a really positive change for businesses.' What the Government has proposed Effective immediately, businesses will be able to deduct 20% upfront of the cost of any new assets (or improvement to existing assets). The balance of the asset cost will continue to be depreciable (if depreciation deductions apply). While commercial buildings remain non-depreciable, they will be eligible for the 20% investment boost. Urgent Budget legislation in the form of the Taxation (Budget Measures) Bill (No 2) ('the Tax Bill') will be quickly enacted to give businesses the certainty they need about what is or isn't eligible. The Government estimates that increased investment in assets will lift GDP by 1% and lift wages by 1.5% over the next 20 years. 'It is understood officials advised the Minister of Finance a 20% expensing regime was the most optimal solution to boost investment,' Walker said. What is eligible Investment Boost will apply to most new assets that are depreciable for tax purposes; it will also apply to commercial buildings. 'Critically, the assets must be new, or new to New Zealand; second-hand assets will not qualify,' Walker said. In the year an asset is acquired, 20% can be claimed upfront and depreciation can be claimed on the balance. For example, if an asset costing $100,000 with a 10% depreciation rate is acquired on the first day of the tax year, an immediate deduction is available for $20,000, and a depreciation deduction of $8,000 (being 10% of $80,000). This gives total deductions in year one of $28,000, as compared with $10,000 under existing rules. What isn't eligible More detail will be included with the Tax Bill commentary, but it's anticipated certain assets will be ineligible: Assets that have been previously used in New Zealand Land (but land improvements will be eligible) Trading stock Residential buildings (there will be exceptions for hotels, hospitals and rest homes) Fixed-life intangible assets (such as patents) Assets that are expensed under other rules (for example, low value assets below $1,000) Other important details The new rule will be optional; There are no limitations on who can use the rules, it applies to businesses of all sizes, and assets of any value; The rules will apply to assets which were first used or available for use on or after May 22, 2025. This will create some boundary issues for businesses who were in the process of purchasing or constructing assets to understand when something is eligible. This should be made clear in the Tax Bill commentary. Capital improvements of existing assets (for example, seismic strengthening of buildings) should be eligible. Depreciation recovery rules will apply to claw back the Investment Boost deduction if an asset is sold for more than its book value. The rules will also apply to assets which have deductions under separate taxation regimes which are akin to depreciation. This includes improvements to farm and forestry land (such as fencing), planting of listed horticultural plants, improvements to aquacultural businesses, and certain kinds of petroleum development expenditure and mineral mining development expenditure. The Investment Boost deduction can be included in R&D tax incentive calculations.
