In times of trouble, the New Zealand government offers tax relief and income assistance for individuals and families with taxable income. The IRD offers a range of options for people who are experiencing financial difficulties.
Individuals tend to take out loans to get rid of tax bills. Instead, they should be exploring the many options to reduce their tax bills first before they borrow money. Before making rash decisions, individuals should first seek professionals for personal tax advice.
The IRD can make special arrangements for individuals and families who have been hit by extreme weather or natural disasters such as floods, storms and droughts. They offer a range of measures, especially for those on an agricultural business.
Individuals may apply for tax exemption and deductions for farm losses and irreparable damage. If the individual chooses to take out a loan from other financial institutions to keep the farm going, he or she may be eligible for lower interest rates for the money borrowed.
Facing Financial Difficulty
There is also a range of options for people who are experiencing astounding debt or grave financial difficulties such as individual insolvency and bankruptcy. For individuals who are finding difficulties meeting their tax obligations, they can make installment arrangements or file a hardship write-off.
This is the IRD’s way of encouraging people not to let due dates pass. If individuals fail to pay the full amount on time, the IRD may apply penalties and interests to their tax bills, which will then cause more financial burden to taxpayers.
Child Support and Parental Leave
Individuals who are finding difficulty meeting their child support obligations can also apply for a re-estimate of their personal income tax or a reduction assessment. Parents on leave from work to fulfill family obligations may also receive tax relief to cover up for the losses.
The IRD offers entitlement rates for eligible working mothers and adoptive parents. On top of the payment they get from the job they are taking leave from, they will also receive parental tax credit.
The worst situation for an individual taxpayer is becoming insolvent, which means he or she can no longer pay their debts. If this happens, the taxpayer can file for a bankruptcy so he or she can get a fresh financial start.