2009 media releases
Inland Revenue warns of party plan pitfalls
8 December 2009
People are being warned by Inland Revenue not to be tempted into network and direct marketing schemes simply because they think they will get tax benefits.
Inland Revenue has issued a Revenue Alert about the schemes, which involve selling a range of products, such as household items and dietary and health supplements, through party plans.
"People getting into this just to try to get tax benefits rather than starting a genuine business could be liable for penalties and interest, or even prosecuted for filing false returns," said Group Tax Counsel, Graham Tubb.
Mr Tubb said promoters of some schemes are convincing people to join on the basis of the tax benefits they say they will get.
"People are told to register for GST to allow them to claim back GST on purchases, many of which just end up being for their own personal use. They're also advised they can claim business-related expenses such as a room in their home they use as an office or their phone line," he said.
"We're concerned people aren't actually carrying on a business and so shouldn't be claiming what are personal expenses. Likewise, if they only occasionally sell something at a fairly low value they probably shouldn't register for GST."
Mr Tubb said people who may have unwittingly claimed tax benefits they are not eligible for should talk to Inland Revenue as soon as possible.
"If something is wrong with your tax returns, it's best to tell us before we find out in some other way."
Anyone who is uncertain about whether or not they are starting up a genuine business should discuss it with Inland Revenue before registering for GST. Business advisors are available to talk to people.
Revenue alerts are an early warning service for tax professionals designed to highlight any significant or emerging areas of concern for Inland Revenue.
Tax professionals and customers can go to www.ird.govt.nz/technical-tax/revenue-alerts and subscribe by email to the revenue alerts, which are also on the website.
For further information:
Catherine Delore
(04) 890 1698
(029) 890 1698
catherine.delore@ird.govt.nz
Saskia van Rijn
(04) 890 1743
(029) 890 1743
saskia.vanrijn@ird.govt.nz
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- High Court ruling on Westpac case
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- Inland Revenue welcomes High Court decision
- Auckland property consultant jailed for tax fraud
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- GST fraudster convicted again
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- Inland Revenue appeals High Court decision
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Corporate Affairs
Inland Revenue
To make a media query:
Phone 04 890 1698 or email mediaqueries@ird.govt.nz
Please note, the email address is only for enquiries from the news media. It is monitored during normal business hours 8am - 5pm Monday to Friday.
P O Box 2198
Wellington 6140
New Zealand
Date published: 08 Dec 2009
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