Photo: NZME
A tax expert believes vague rules around government Covid-19 support payments have caught some small businesses out as inland revenue demands refunds.
RNZ reported Auckland business owner Hugh Grierson had been ordered to pay back more than $46,000 in Covid support payments by Inland Revenue.
He was told he must pay some of the money back, because some of the funds had been spent on stuff it should not have been - like paying wages to himself.
Grierson said the rules had been unclear when businesses applied and that IRD was now "backpeddling.
Deloitte NZ tax partner Robyn Walker told Checkpoint the information on the Inland Revenue website, during the time of application, was "very high level."
She said the website did say "on sort of the general pages that the Covid support or resurgence support payment is to cover business expenses and it doesn't go into any fuller details into exactly what that precisely means."
However when businesses went to apply for the payment, she said a declaration mentioned "that the payment would not be passed through to any shareholders, owners, partners, trustees, members of the business, for example by way of a dividend or any other payment."
"So, Inland Revenue's view seems to be that any money that went to any owners of the business has breached that particular terms, and that's created confusion," she said.
She said many business owners, like Grierson may not have thought that deeply about this declaration.
Walker said the details of the support payment could be confusing for advisors and tax experts.
