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  Reply # 1498083 23-Feb-2016 20:22
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surfisup1000:  <snip> I'm the opposite, never get into debt, ever. But, that is probably a handicap too.  

 

No it's not - it's freedom - freedom from debt.

 

One very good definition of wealth is having no debts.

 

I've been "wealthy" for decades.

 

If I can't afford to pay for it today, I can't afford it.

 

Simple.

 

 





Sideface


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  Reply # 1498113 23-Feb-2016 21:04
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surfisup1000:

macuser:


Actually, IRD primarily targets things where it will receive a ROI for the time invested (think staffing and expenses for the audit), it's less worth while auditing a sole trader who may have a 1-2000 tax liability than a multi million dollar company that has hundreds of thousands that may not be accounted for.


I don't think too many of you are self employed, but if you've ever paid GST or income tax late, you will know the penalty fees are huge - they probably make a killing off that alone.


 



My partners brother (painter) was audited and he was on a rather low income. I didn't see the point in putting the screws into him as his earnings were quite low and his annual tax liability wsa very small .


Regarding penalties, use of money interest is a penalty.  In the IRD manual...


"Interest isn’t a penalty—
it’s a charge for the use
of money."


I call BS on that. The IRD UOMI interest rates are devised by loan sharks.     


You can pay all your tax amounts on the correct dates yet IRD will still charge you a huge amount of interest totally out of alignment with bank rates. I got charged 8k UOMI for paying my tax on all the correct dates.  If I'd had the money in the bank I'd have earned less than 1k after tax.



The biggest BS is that when they owe YOU money, the interest rate they pay you is far lower than when you owe them!!





 
 
 
 


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  Reply # 1498128 23-Feb-2016 21:21
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TinyTim:

Why did you get charged 8k for paying your tax on all the correct dates?

 

Because I had use of 'their' money .    This is use of money interest, it is what they charge you for every day that you have your money and not them. 

 

I guess the idea is that the money belongs to them, meaning I am earning interest on money that does not belong to me. So, they claw that back.  The terminal is due nearly a year after the end of the tax year, so that is the period they charge UOMI I think. 


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  Reply # 1498143 23-Feb-2016 21:37
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surfisup1000:

TinyTim:

Why did you get charged 8k for paying your tax on all the correct dates?


Because I had use of 'their' money .    This is use of money interest, it is what they charge you for every day that you have your money and not them. 


I guess the idea is that the money belongs to them, meaning I am earning interest on money that does not belong to me. So, they claw that back.  The terminal is due nearly a year after the end of the tax year, so that is the period they charge UOMI I think. 



You must have estimated your provisional tax then? You only get charged uomi as an individual if your Residual income tax is over $2500 and you estimated your provisional. Or you had RIT of over $50000.
Or was this not for an individual?

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  Reply # 1498156 23-Feb-2016 22:12
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Geektastic: The biggest BS is that when they owe YOU money, the interest rate they pay you is far lower than when you owe them!!

 

 

 

 

That's because it's a penalty rate, to incentivise people against underpaying provisional tax. If they paid you the same rate, then they would in effect be paying you a steep penalty if you overpaid provisional tax, and pretty much everyone would deliberately overpay their provisional by as much as they possibly could. That would cost the taxpayer a small fortune, as well as stuffing up the IRD's cash flow management.

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  Reply # 1498171 23-Feb-2016 22:46
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Sideface:

surfisup1000:  <snip> I'm the opposite, never get into debt, ever. But, that is probably a handicap too.  


No it's not - it's freedom - freedom from debt.


One very good definition of wealth is having no debts.


I've been "wealthy" for decades.


If I can't afford to pay for it today, I can't afford it.


Simple.


 



And if you have a little savings then you be able to weather the storm better than 95% of NZers, who blamed the GFC when the banks stopped lending them money. I truly wish more people handled their money like you. I'm sure there would be more affordable housing and less council and government debt as a consequence.

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  Reply # 1498192 23-Feb-2016 23:00
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Kiwifruta:
Sideface:

 

surfisup1000:  <snip> I'm the opposite, never get into debt, ever. But, that is probably a handicap too.  

 

No it's not - it's freedom - freedom from debt.

 

One very good definition of wealth is having no debts.

 

I've been "wealthy" for decades.

 

If I can't afford to pay for it today, I can't afford it.

 

Simple.

 



And if you have a little savings then you be able to weather the storm better than 95% of NZers, who blamed the GFC when the banks stopped lending them money. I truly wish more people handled their money like you. I'm sure there would be more affordable housing and less council and government debt as a consequence.

 

The idea that all debt is bad debt is rubbish.


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  Reply # 1498228 24-Feb-2016 03:14
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bazzer:

Kiwifruta:
Sideface:


surfisup1000:  <snip> I'm the opposite, never get into debt, ever. But, that is probably a handicap too.  


No it's not - it's freedom - freedom from debt.


One very good definition of wealth is having no debts.


I've been "wealthy" for decades.


If I can't afford to pay for it today, I can't afford it.


Simple.




And if you have a little savings then you be able to weather the storm better than 95% of NZers, who blamed the GFC when the banks stopped lending them money. I truly wish more people handled their money like you. I'm sure there would be more affordable housing and less council and government debt as a consequence.


The idea that all debt is bad debt is rubbish.



Agreed. I saw too many people fall over, because of consumer debt for luxury items.

Debt is also a great leverage tool when used to fund income generating aquisitions.

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  Reply # 1498484 24-Feb-2016 13:58
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The worst ones are the ones who do cash job and not pay tax then have the gall to claim WFF based on a lower income. As a result of this the government has to borrow more which in turn means the interest NZers pay is higher.


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  Reply # 1498552 24-Feb-2016 14:57
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I used to work for a chap who reckoned he was a millionaire, because "if you owe a million bucks, then you're worth a million bucks to someone".

 

I had to find another job once his company went titsup.


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  Reply # 1498556 24-Feb-2016 14:59
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BlueShift:

 

I used to work for a chap who reckoned he was a millionaire, because "if you owe a million bucks, then you're worth a million bucks to someone".

 

I had to find another job once his company went titsup.

 

 

 

 

I once met a property developer who said "you're not trying hard enough if you haven't been bankrupt at least once".

 

I was 21 when I heard this. Even then I thought he was an idiot.


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