The "hidden economy" of cash jobs and undeclared income remains a strong focus for Inland Revenue, who are scrutinising the construction industry for record keeping and tax compliance.

Inland Revenue have launched another advertising campaign to encourage subcontractors to pay their income tax or risk facing punishment. The campaign also encourages people to confidentially report cash deals and other types of non-taxed contracting.

Inland Revenue have advised they will be writing to construction businesses to remind them of their obligations to declare all their income - no matter how big or small - when they file their GST and/or income tax returns.

Evasion includes: not maintaining adequate records, omission of information from tax returns and forms, or providing incomplete or misleading information.

Inland Revenue are getting smarter at finding those who fail to declare their income. Punishments can include late payment penalties, shortfall penalties, criminal convictions or the ability to contract for work.

We recommend businesses thoroughly review the robustness of their systems, ensuring all jobs are recorded appropriately and GST is properly dealt with, as well as making sure all income is declared in annual tax returns so the correct amount of tax is being paid.

Inland Revenue advise that making a full voluntary disclosure may benefit you by not being prosecuted in a court of law, or having your shortfall penalty reduced by up to 100%.

We can help you put your taxes right - contact our office to discuss your situation with one of our friendly advisers.