IRD Debt Collection Focus - IRD continues to focus on debt collection and in most instances are gaining great results.

For new tax debt, it is understood that IRD are taking a more aggressive approach to collection measures where as old debt appears to be a more tailored approach. This seems inconsistent but delivers a message that debt is no longer going to be ignored by the IRD. In most instances where clients have required a debt instalment arrangement by IRD, this has been confirmed without hesitation - my message, don’t ignore debt, address it head on!

IRD warning in regard to PAYE deductions - IRD has issued a warning to employers that making deductions from an employee’s salary or wages, and not passing them onto IRD is a serious offence that can lead to prision time.

This is serious and generally comes about by significant or emerging tax issues of concern. An employer must pay PAYE and other amounts deducted from an employee’s salary or wages to IRD by the due date. Other employer deductions, such as for KiwiSaver and student loans, are also included. Making deductions and failing to pay them to IRD carries a maximum sentence of up to 5 years in prison. Anyone who aids, abets, incites, or conspires with another person to commit to do that also commits a criminal offence. This means, for example, that the director of a company who decides that the company will not pay the deductions to IRD may be prosecuted for the company’s failure to pay. IRD has successfully prosecuted a number of people for this type of offending, and several were sent to prison.

IRD is reminding investors of crypto-assets to get compliant - IRD are on alert, get compliant so there are no expensive surprises down the line!

IRD has identified 355,000 unique crypto-asset users in New Zealand, undertaking around 57 million transactions, with a value of $36 billion. Crypto-assets are treated as a form of property for tax purposes and what people make from selling, trading or exchanging crypto-assets is taxable. Any profit made is treated as income, added to other annual earnings, and taxed within a person’s regular income tax bracket. If people are making money from crypto-assets they should be thinking about their tax obligations on this income and the risks of not declaring all related taxable activities.

Access to increased data has allowed IRD to identify people with significant crypto-assets and New Zealand is now implementing the Crypto-Asset Reporting Framework (CARF). Through CARF and annual exchanges of information with other tax authorities, IRD will also receive information on transactions and transfers of crypto-assets that take place overseas by New Zealand tax residents, bringing a much needed visibility to the crypto world, shifting from being a vague grey area to international transparency with much tighter enforcement. IRD will act and will match the information to tax returns and follow up on any discrepancies. A first batch of letters has now been sent to people who would normally have their tax assessed automatically and who IRD knows have traded on one or more crypto-asset exchanges; the letter is an opportunity for people who received income from disposing of crypto-assets (including when they are sold, swapped, or exchanged) to review their tax position and correct any errors.

IRD are watching the Horticulture sector closely - IRD is calling out a number of practices prevalent in the horticultural sector which it believes pose a significant risk to the integrity of the tax system. This is not new!

The practices include workers being paid in cash, complex contracting arrangements being used to obscure what’s really going on, and obligations under the schedular payments rules not being met. The IRD is concerned and has issued a Revenue Alert about the non-compliance. Because of the concern, IRD is increasing its focus on growers, contractors and subcontractors and will investigate anything suspicious. IRD is aware of arrangements where false invoices are created and used to obscure the true nature of transactions and can result in the under-reporting of GST, PAYE and/or income tax obligations. IRD is increasing its scrutiny of new applications for GST registration by entities in the horticultural sector. IRD is also looking at non-compliance with schedular payment obligations and at the use of certificates of exemption and tailored tax rates by taxpayers in the sector.

IRD is also increasing action taken to pursue outstanding debt in the horticultural sector and will use the range of powers to collect this debt. IRD is also concerned about broader non-compliance with GST, PAYE and income tax obligations in relation to the supply of labour in the horticultural sector.

If evidence of non-tax offending by a taxpayer in the sector is identified, IRD will consider whether information may be shared with other government regulators/enforcement agencies such as Police and the Labour Inspectorate/Ministry of Business, Innovation and Employment (MBIE).

In the year to June 30, 2026, Inland Revenue opened around 130 investigations into horticulture businesses, involving $7.2 million in discrepancies. 45 cases are still open. Three people involved in the horticulture sector were sentenced to home detention during the year on tax evasion charges.