Findex taxation advisory partner Craig Macalister says Inland Revenue is targeting arrangements in the horticultural sector designed to avoid GST and dodge withholding tax on payments to contractors.

He says the focus is not businesses simply falling behind on tax, but disguised invoicing and companies set up with no assets to meet the liabilities they run up.

“This is verging on invoice scams.”

He says it leans towards fraudulent activity rather than an accountant ‘getting cute’ with the numbers.

He says a revenue alert works like a rugby referee’s red card; Inland Revenue can prosecute under the Crimes Act rather than income tax rules.

Similar behaviour appeared in fruit growing in 2006, prompting law changes that have not stopped it from potentially recurring now.

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