On 15 July 2014, the Minister of Revenue, the Hon Todd McClay, announced that flood affected farmers in Northland will be offered assistance through Inland Revenue’s income equalisation scheme following the declaration of a medium scale adverse event by the Primary Industries Minister, the Hon Nathan Guy.
The income equalisation scheme allows farmers to better manage peaks and troughs in their income by allowing money to be put aside from a better year and withdrawn against a not so good year.
Inland Revenue has agreed to relax these rules by allowing late deposits from the 2014 income tax year to be made up to 30 April 2015, regardless of when the 2014 tax return is filed or the due date is for filing that return. Early refunds will also be allowed. All applications for an early refund must be in writing and will take approximately 20 days to be processed.
An affected farmer will need to:
Provide evidence of how they have been significantly affected by the floods — the minimum criteria for this is a statement signed by the farmer or tax agent that the farmer has been significantly affected
Ensure the deposit is received by Inland Revenue by 30 April 2015
Provide a notice with the deposit stating that:
it is for the main income equalisation deposit scheme
it is to apply for the 2014 tax year, and
the late deposit criteria in the Inland Revenue notice apply.
Inland Revenue will allow those Northland farmers materially affected by floods to make early withdrawals. In this case, materially affected means that net income has been or will be significantly decreased as a result of the floods and the withdrawal is needed to cover the income gap that results in a following year.
If you wish to talk further about this please do not hesitate to give Daniel a call on 094700140