“Half Compensation Will Go In Tax”

Press, Volume CVI, Issue 31080, 8 June 1966, Page 1

“Half Compensation Will Go In Tax”

(New Zealand Press Association) AUCKLAND, June 7. A Government ex-gratia payment of £4750, made to Sprinfield Aniaries, Ltd., Rotorua, after the seizure in 1963 by the Health Department of honey worth £22,000, is to be taxed as part of the company’s income in the last financial year, according to the managing-director of the company, Mr W. J. Holt. The payment was made in March this year.

Mr Holt estimates that less than half of the £4750 will remain after taxation.

He was informed of the position today when he called on the Inland Revenue Department in Auckland. He said a senior tax official told him that compensation paid for the loss of goodwill was not taxable, but all other compensation was taxable in the year it was received. “This means that any future compensation we may get will be taxed unless it is specified as being for the loss of goodwill,” said Mr Holt. The £4750 had been paid

to allow the company to continue its business until a Anal settlement on the amount of compensation due was reached. he said.

In 1963, the company had estimated it would take seven years before it was back to its original financial position. “But that was three years ago.” he said. . “We don’t know how long it will be now.” The Government and Springfield Apiaries agreed to accept the outcome of an independent inquiry to determine the amount of compensation owed to the company after the loss of the honey. The honey was seized after tests by a Government scientist for poison. The company appealed against the seizure and the Health Department was asked to give evidence in Court on how and why the honey was adjudged toxic. The evidence was never

given and the department said the company could have the honey back. At the same time it admitted that the tests were not completely reliable The setback to the company as a result of the seizure is said to have cost it £15.000