How to avoid being double-taxed

Press, 17 April 1979, Page 17

How to avoid being double-taxed

Many apparent evasions in a tax return are simply mistakes made by taxpayers, who have failed to understand the instructions on their return form, IRS or IR3.

Other mistakes are caused by ambiguity in the wording of these instructions, such as the request to “Add gross earnings and P.A.Y.E. deductions” on page 2 of this year’s IRS. The instruction means that gross earnings and P.A.Y.E. deductions should be totalled separately, but many taxpayers have been caught adding the two figures together and finding themselves double-taxed. A list of common errors provided by the Inland Revenue Department shows many areas in which taxpayers can help themselves. Mr Simcock points out that those who have a tax advisory company fill in their return can obtain the same advice, ' free of charge, from the department. One thing the department will not do, however, is to fill in the form, as it must sit in judgment on it later.

Most taxpayers now receive a labelled return, with their IRD number printed on it. Those who do not receive a labelled return often forget to include the IRD number; the number has made processing of returns an easier job for the department. Returns are not signed in a surprising number of cases: the return cannot be handled until a signature is obtained.

Some taxpayers have not worked the full 12 months of the financial year, and forget to give the reasons for the shorter period of work.

There is a reluctance on the part of some taxpayers to part with their certificates showing earnings and tax deductions, receipts for school fees and donations.

Details of expense claims, of a spouse’s income, of interest and dividends, housekeeper’s rebate and dependant rellative’s rebate, are often missing. Similarly, the family benefit number is not shown when claiming the Single Income or Young Family rebates.