- Genuine errors
If you have made a mistake in a return, you can ask us to correct it. Clear and genuine errors such as arithmetic or transposition errors can be corrected in this way.
You need to tell us:
- the tax type and period containing the error
- the amount of tax in error
- the nature of the error
- how the error occurred
- how and why the error was identified
- what the amended figures in the return should be to ensure a correct assessment is made.
You'll still have to pay any tax owing because of the mistake, but if you pay it by the due date we set there will be no late payment penalty (or non-payment penalty, in the case of an Employer monthly schedule (IR348)).
We'll send you an amended assessment that will tell you how much you have to pay and when to pay it.
If you have more than $100 tax to pay, interest will be charged from the day after the original due date for paying the tax, up until the day the tax is paid in full. Depending on how your error came about, you may be charged shortfall penalties.
If a person has made a mistake in a GST return they can self-correct in the next GST return. The total tax discrepancy as a result of the mistake must be $500 or less.
For more information about correcting genuine errors, see our standard practice statement SPS16/01 - Requests to amend assessments.
- Late claim for GST on an expense
If you omit to claim GST for an expense that you are entitled to in past return periods, you may claim it in the current or future period. You can only make a late claim for GST on expenditure incurred in the previous two years.
Exceptions to this two-year rule include:
- the inability to obtain a tax invoice
- disputed expenses
- mistakenly treating a supply as non-taxable
- clear mistakes or simple oversights that you've made.
- Adjustments to your tax returns
For errors that involve an adjustment to your sales, income or expenses for any tax type, you may send a Notice of proposed adjustment (NOPA) on a Notice of proposed adjustment form (IR770), which will initiate the disputes process. Except in very limited circumstances, you must send us your NOPA within four months of the issue date of the notice of assessment.
When making an adjustment you must keep the following details as part of your records:
- return period in which the error occurred
- the amount of tax involved
- nature of the error
- return period when the correction was made.
- Voluntary disclosure
A voluntary disclosure is when you tell us what is wrong with your tax returns before we find out in some other way. It may involve such things as omitted income or incorrectly claimed expenses.
You can make a voluntary disclosure:
- at any time before being notified of a pending tax audit or investigation (pre-notification disclosure), or
- after you have been notified of a tax audit or investigation but before it begins (post-notification disclosure).
- Advantages of voluntary disclosures
When we find you've made an error in your tax returns, you may face significant shortfall penalties. By making a voluntary disclosure before we notify you of a pending audit you'll get the benefit of:
- a reduction of up to 100% of any shortfall penalty charged
- not being prosecuted in court.
If you make a voluntary disclosure after we've notified you of a pending audit but before we start the audit there are still some benefits:
- a reduction of up to 40% of any shortfall penalty charged
- we may only consider prosecution in cases of evasion or fraud
- How to make a voluntary disclosure
To make a voluntary disclosure you can:
- complete a Voluntary disclosure (IR281) form, or for property disclosures use the Voluntary disclosure (IR281P) form
- contact us by phone, letter, fax or secure email through myIR
- make an appointment to see an Inland Revenue staff member, and provide the information during an interview.
Note: Filing an amended return isn't a way to make a voluntary disclosure - you should not file more than one return for a period. You need to let us know your disclosure in one of the above ways.
In your disclosure you need to tell us what is wrong with your tax returns and why. Give as much information as you can, including:
- your details, or the details of the estate, trust, partnership or company (including name, trade name, IRD number, address, date of birth or start date and contact details)
- describe why you are making a voluntary disclosure (the nature of the errors or omissions)
- the year(s) or period(s) concerned
- an explanation of why the errors or omissions occurred
- enough information to enable us to determine how much tax you owe.
For more information see our guide Putting your tax returns right (IR280) under "Forms and guides" and our standard practice statement SPS16/01 - Requests to amend assessments.
If you make a voluntary disclosure, you will have to pay the tax outstanding. You may also have to pay:
- interest on unpaid tax, and
- a shortfall penalty.