Self-employed caught in 'Monty Python' tax trap

A "Monty Python" bungle by Inland Revenue left thousands of self-employed New Zealanders unable to claim tax back on charitable donations.

Revenue Minister Peter Dunne said yesterday he had received dozens of complaints from self-employed people who had been told by IRD their tax credit claims would not be honoured unless they quickly filed a tax return.

But IRD has not issued the self-employed tax return or IR3, leaving people in a catch-22 situation of losing thousands of dollars for failing to fill in a form that was not available.

"People were pretty angry, understandably so, because they felt like it was a bit of a Monty Python situation," he said.

About 22,000 New Zealanders use a IR3 tax return every year. A self-employed Christchurch man said he tried to claim back about $1200 in charitable donations last week but was told he needed to file a tax return form within three weeks or he would get nothing.

"But the only thing preventing my tax return from being filed was that IRD were late sending out the tax packs in the first place," he said. "It's astonishing."

He called IRD to complain but was rebuffed before taking his concerns to the minister.

"I don't want to see self-employed people discouraged from making donations."

Mr Dunne said he had talked to the Inland Revenue commissioner last week after the flood of complaints. The Christchurch man and others affected had received apologies with their tax credit no longer at risk.

- © Fairfax NZ News