Posts by Matthew Poole
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Ross, by "no ACC coverage" I assume you mean income protection? Coz ACC is meant to cover treatment for all injuries that occur on NZ soil.
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Amy, and that'll be done six times a year? Our fruit and vege prices fluctuate dramatically, so it's not a once-a-year exercise to carry out that kind of calculation. Plus, what if you're a large family? Or a small one? Or single and living alone? What's the pro-rata on the cheque?
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If government wants people to eat that expensive fresh food, then levelling the costs out would seem a good idea.
In which case, a better solution needs to be found than meddling with GST. Ignoring the compliance cost issue, ignoring the implementation cost issue, the seasonal price fluctuation of most fresh produce is many, many times the amount of GST collected on a particular item at its most expensive.
Take grapes, for example, which can nearly double in per-kilo price between winter and summer. Apples, oranges, peaches, tomatoes, lettuces, cabbages, carrots... Need I go on? -
Yet behind this is the Supreme Court's 2006 decision on the case of miniature model maker James Bryson, which reversed the Court of Appeal's earlier decision, and found that Bryson was in fact an employee...and not merely a contractor. The screen industry is full of contractors – I'm one – and there was a wide range of opinion about that case. The extent to which the Supreme Court's decision on Bryson can be applied to actors would, I'm sure, be equally hotly debated.
Note that the employee/contractor question is almost exclusively raised in cases around the applicability of ERA protections on holiday pay, sick leave, notice of termination, etc. When we looked at the distinction in tax law, the lecturer said that most of the authoritative cases on the distinction are employment law cases not tax law cases, even though it's much important for tax purposes to establish if you're a contractor or an employee.
The other thing that she told us was that these decisions normally hinge on the specific facts. Bryson's facts were pretty narrow, and general applicability to the rest of the film industry, especially to "talent", isn't terribly likely. -
Incidentally Matthew, do you work in a call centre? Because "the computer won't let us" is the standard excuse CSRs use for business failings?
Have I said it can't be done? Have I said it's impossible? Have I said computers can't be made to do it? Have I? No, I haven't. I've said it'll be expensive, and complicated, and the costs associated with introducing such complexity will be very significant; sufficiently significant that I doubt the benefit will outweigh them by very much, in fact, if at all.
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If enforcement is the problem, we have a judicial system that doesn't require money for representation. We have CAB.
And the CAB lawyer will represent you before the TRA? Prepare your response to a demand for arrears? Explain to you how to classify your various horticultural produce? Pull the other one. Plus, there're how many CAB lawyers with how many hours available to advise how many tens-of-thousands of small-business owners? Your faith in the free resources is touching, but very, very naive.
supermarkets would have to trade at the same level as the smaller ones or they would loose business
You'd think so, wouldn't you? But it's not true. Plenty of evidence of small operators under-cutting the supermarkets in a huge way on fruit and vege, but do the supermarkets drop their prices? Do they hell.
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Another question, what would be the lead-in time? How many years? It's acknowledged that there won't be 100% compliance with the rate increase on Friday, and that's with plenty of signalling that it was coming and only a simple increase in a number. Variable application is a huge additional level of functionality, not just bumping some stored values that apply to every SKU.
I wouldn't expect this to be viable on less than two years' implementation time, unless IRD were prepared to pretty much ignore enforcement for at least a full year after implementation, and there'd be a huge drag on the economy in terms of money wasted on implementation over that period.
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If IRD suspected a store was claiming beer as carrots, they can audit the till records, do some test buys and look for them, etc. (the auditors will also check that sort of thing). Then the store gets fined several times the tax, which is a good reason not to try it on.
1) Not even thinking such an egregious transgression. Example: bagged lettuce leaves, or a halved cabbage. Where's the line? Someone's got to be the test case. And yes, those absolutely will be matters that have to be decided, and those decisions cost money for the involved taxpayer(s) and for the IRD.
2) Gotta have auditors to do that. More scope for mistakes/malfeasance, more auditors required to ensure compliance. More auditors means more cost. Gotta have lawyers to run the cases, either to the TRA or on through the Courts. More legal spending means more cost. More cost to IRD has to be paid for from taxation, either by increasing taxes or by cutting other spending.
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Yeah enforcement is always the area where I thought this would come completely unstuck.
We've seen anecdotes in here this year from people who've been told that the restaurant's EFTPOS machine is "out of order", so can they please pay cash. Cash goes into the restaurantuer's pocket, tax man never sees any of it, no GST receipt to bugger things up. And that's where the system is pretty hard to apply selectively. Once you give room for judgement, it just gets worse. Humans are very fallible, and there are plenty of people out there who'll push the boundaries as far as they possibly can, for whatever reason. Right now the boundaries are quite concrete, so there's not much room for interpretation of what is and isn't covered by GST. This change would replace them with frayed elastic walls.
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GST is already the most-disputed part of our tax system and it's incredibly simple.
How? Who disputes it?
Businesses, one assumes. That tidbit was from one of my tax lecturers, who's also a consultant to the IRD. I assume she knows what she's talking about when she tells students such things. She didn't go much into the whos and whys and wherefors, just mentioned it in a lecture on tax enforcement.
Who pays for appeals to the Taxation Review Authority? To the Courts? For the accounting and/or legal advice on classification of goods? The IRD?
Authority? As per usual I imagine. The rest of your waffle is just that. It's called best business practice Matthew Poole, if you're interested in one. Doh!
Not that I really understand what you're saying here, but the money to pay the costs associated with that "best business practice" have to come from somewhere. Retailers don't just magic up money for paying accountants and lawyers, y'know. If they have to pay more for professional advice, that has to come from the margin on what they sell. And they will have to pay more, even if they manage not to fall foul of the law on compliance.
You don't think the IRD just magics up money to pay for compliance enforcement, do you? It comes from taxation. More need for enforcement means more tax money going into collecting tax. So either spending on other services gets cut, or tax gets raised elsewhere.