Geektastic:

 

Linuxluver:

 

timmmay:

 

I wouldn't call that corruption, I'd call it tax avoidance or evasion. Quite different. Corruption is someone in power asking for a bribe, he just gave you an option.

 

 

It's a conspiracy to break the law. 

That's corruption. But it is interesting people do try to draw some sort of distinction between the two. But it really boils down to "My corruption is OK, but theirs isn't". It's all illegal....and we all end up paying for it in higher taxes or a lower level of services.  

 

 

 

 

Well, when you say "we all" you presumably mean "the minority of taxpayers in NZ who are net payers rather than net recipients" because that number is actually fairly small as a percentage.

 

LL means taxpayers, thats everyone that earns an income. Whoever pays tax pays NZ's bills. If less tax is collected, tax rates must rise or the services must reduce

Geektastic:

keewee01:

This annoys me also.

 

I know someone who earns enough from cash jobs they take an extended overseas holiday each year to burn up the cash. Grrrr.

 

I know a chiropractor who earned enough to put $40,000 in cash down as a deposit on a house!! And 12 months later bought a $25,000 motorbike by trading one he had imported when he moved here and topping up with cash...he also keeps thousands in gold and silver.

tripp:

 

You're not the only one. 

 

I know someone that gets paid in cash for the work he does (He works for himself) yet has no company setup and I don't think the person is bright enough to work out income tax/GST etc and has done things like this before.

 

Just does what he does, gets paid in cash and repeat.

 

I can't report him as I have no proof he is doing what I think he is doing.

 

 

 

 

I often hear dodgers claim that they don't know how to regularise their affairs. That excuse/explanation makes me laugh. One thing I find amazing is how so many small business operators seem to believe that they have some God-given right to avoid the costs that other people incur, e.g. paying for professional advice.

Geektastic:

 

I know a chiropractor who earned enough to put $40,000 in cash down as a deposit on a house!! And 12 months later bought a $25,000 motorbike by trading one he had imported when he moved here and topping up with cash...he also keeps thousands in gold and silver.

 

Only $40k? That's only just a $200,000 house at 20% deposit. I can't imagine you can find anything much for that price anywhere outside of very small towns these days.

dejadeadnz:

 

...I live in Albany, Auckland and we are both professionals earning low 6-figure incomes. We are not rich but certainly likely to be far better off than most of our neighbours. Yet there isn't a long weekend where all of them don't dash off somewhere; there isn't a garage in our cross-lease that isn't just crammed full of items. Every house here (apart from us) has changed cars in the last 2 years.

 

My interpretation :

1. You maybe underestimated your neighbour(s)

2. Your neighbour(s) possibly manage their money well

Last I knew, cash was still legal tender. As such, I reckon it's perfectly acceptable for someone to request this as preferred method of payment. So why the automatic assumption by all that any transaction in cash is for tax avoidance and should be dobbed into IRD?

Geektastic:

 

 

 

I know a chiropractor who earned enough to put $40,000 in cash down as a deposit on a house!! And 12 months later bought a $25,000 motorbike by trading one he had imported when he moved here and topping up with cash...he also keeps thousands in gold and silver.

 

All through unreported cash jobs?

Did they advertise the fact that they were avoiding tax? Or are you making judgements on the way they spend their money?

dafman:

 

Last I knew, cash was still legal tender. As such, I reckon it's perfectly acceptable for someone to request this as preferred method of payment. So why the automatic assumption by all that any transaction in cash is for tax avoidance and should be dobbed into IRD?

 

I believe it would be the fact that the "cash" price is usually 10-20% less than non cash.

nakedmolerat:

 

 

 

My interpretation :

 

1. You maybe underestimated your neighbour(s)

 

2. Your neighbour(s) possibly manage their money well

 

Not necessarily an invalid interpretation but somewhat unlikely, especially re: (1). I am the BC chairperson here and also know what most of my neighbours do for work. Because I work for a bank, I frequently get asked for advice on how to borrow more and more money. Without wanting to go into too much details, as someone who also provides volunteer financial/budget management advice, many of my neighbours fit into what I would consider "Going crazily in debt to keep up with the Joneses" variety.

ajobbins:

 

Geektastic:

 

I know a chiropractor who earned enough to put $40,000 in cash down as a deposit on a house!! And 12 months later bought a $25,000 motorbike by trading one he had imported when he moved here and topping up with cash...he also keeps thousands in gold and silver.

 

 

 

 

Only $40k? That's only just a $200,000 house at 20% deposit. I can't imagine you can find anything much for that price anywhere outside of very small towns these days.

 

That is assuming it is a 20% deposit.But if they already own a home, or can show wealth or earnings,  they could pay a far smaller deposit. Normally a 5-10% deposit is required when an offer is accepted, which could be what they are referring to. But outside Auckland homes between 200-300 k are being sold in suburbs of Wellington for example. I wouldn't touch Auckland, it is a head case and potentially a huge bubble that shouldn't have been allowed to occur. You don't touch what you don't understand.

I get clients who pay by cash, some asking if paying cash will be cheaper (ie saving the GST).  I say no, of course.

wasabi2k:

 

dafman:

 

Last I knew, cash was still legal tender. As such, I reckon it's perfectly acceptable for someone to request this as preferred method of payment. So why the automatic assumption by all that any transaction in cash is for tax avoidance and should be dobbed into IRD?

 

 

I believe it would be the fact that the "cash" price is usually 10-20% less than non cash.

 

As there is no need to pay the 30 to 33% marginal tax rate, and to give GST back. At 20% discount he is creaming it. And using the tax system to deduct expenses of the reported income. But you can be caught. And not just by being dobbed in. 

I always thought the cash price was to ensure the vendor received the cash then and there, rather than delayed via the purchaser sorting out finance or putting it on a credit card. I have no problem paying someone cash for a job and discounting a payment for cash, but they still need to give me a GST invoice. 

This is an interesting topic, as a computer technician i get the opposite happening,

I sometimes get people asking me to take the cash and don't worry about invoicing. I still put it through the books.

I have found a lot of elderly people to be like this, they want you to have it all and not worry about the IRD's takings. One guy asked for my cash rate so he got a smaller bill!

Talking to a builder the other day, he gives the odd cashie when people ask for it, then after the job some people want a receipt for the work! What a joke he thinks.