What a devastating weekend for Canterbury! The way the whole community and civil defence have responded is amazing and hopefully it’s not too long before Cantabs are back to full strength.
This horrible event is going to test the usefulness of some of the GST rate change transitional measures contained in the Bill currently before Parliament.
The special provisions deal with situations where insurance claims are accepted before the rate change date (1 October) but paid after that date. There are also special rules dealing with when insurance companies recover payments from third parties.
I guess businesses will look to insurance policies to recover losses and where those claims are accepted before 1 October but not paid out until after there will be some uncertainty over which GST rate applies.
The new legislation helps in a way to clarify things but it is another set of rules people have to learn.
Hopefully the IRD go easy on anyone who, in the aftermath of the earthquake, may not get things 100% right when they file their September and October GST returns. Getting everything ready to cope with the GST rate change is challenging enough. Businesses in Canterbury are going to need to be shown extra leniency and understanding by the authorities in the next few months. Let’s face it, at times like this 100% accurate tax compliance isn’t going to be as high on their agenda as it would otherwise be.
Good luck to all.