Evidence of IRD Process Failure
The Inland Revenue Department is tasked as an agent of the Accident Compensation Corporation to collect all PAYE levies at the time of payment to be provided to the Corporation. The IRD is already doing this on permanent employee and shareholder employee incomes but is not doing so when it comes to self-employed earners who receive PAYE schedular payments.
This is evidently because the Corporation has instructed the Commissioner to not levy the payments in question. The duty to make the arrangements to collect levies lays with the Corporation and the IRD evidently decided it was following lawful instructions from the Corporation. It seems evident that the IRD sees itself in the subservient role in this matter.
What is also evident is the lengths the IRD is willing to go to when accommodating the needs of the Accident Compensation Corporation, for the fact is that it is not possible for legislation such as this to be mangled to the degree the Corporation has achieved, without showing glaring flaws in the process.
It is extremely difficult to reconcile how an agency that is well known for its pedantic and often draconian application of the Income Tax Act 2007, could go on to create the documentation I provide here as evidence. There is much that is wrong with this document as I will now demonstrate.
It is fact that PAYE Income schedular Payments are in fact PAYE Income as described in the Income Tax Act 2007 RD 3.
RD 3 PAYE income payments
(1) The PAYE rules apply to a PAYE income payment which—
(i) a payment of salary or wages, see section RD 5; or
(ii) extra pay, see section RD 7; or
(iii) a schedular payment, see section RD 8:
At the top left of the document there is a field that says Income. The entry in that field is schedular payment. Not PAYE schedular payment, schedular payment. As a result schedular payment is being presented as its own category of income and not PAYE Income as required by law. Any claimant who received this information is being misled and the true nature of their earnings concealed.
In fact it was only when I looked into the Income Tax Act 2007 that I learned the payment in question was in fact PAYE.
To the right of that field is a deductions field. The entry in that field states "schedular deduction". The problem here is that deduction is a PAYE deduction and this schedular deduction process is not recognized as part of the process for this category of earner. Essentially the IRD has created a category of Income that is not supported in law and they have created an equally unlawful "schedular deduction" process to support this unlawful Income category.
To be clear. There is no such income category in the IT Act 2007 that is known as a schedular payments. There is no such deduction process that applies called "schedular deductions". What we see here is a construct that has resulted due to the Corporation's unlawful failings but what stands out in this is just how far the IRD has been willing to go to accommodate that rogue agency.
Lower down the form we can see that there is a PAYE deduction field which states 0.00. Yet as we know schedular payments are PAYE Income as described in RD 3 of the IT Act 2007. Therefore the deduction that was made was a PAYE deduction yet this form clearly shows that no PAYE deduction is recorded. Once again the claimant is being given completely inaccurate information.
The ACC levy field states 0.00 and that is because the levy that was supposed to be deducted at the time of payment as required by section 221 of the AC Act 2001 has not been deducted.
There is a field that is supposed to show any earnings that are not subject to ACC levies. ACC states that schedular payments are not levied yet this payment that is apparently not levied is not being presented in the field that shows earnings not subject to levy.
Having misrepresented the income and earnings category for the payment in question, IRD has evidently added two more fields to the form that denote these unlawful schedular payment Income and schedular deductions processes. If the earnings were being lawfully presented then those fields would not exist. The earnings in question should be presented in the PAYE fields but clearly they are not.
It is undeniable fact that provided document clearly shows that IRD is applying the Income Tax Act 2007 unlawfully in support of the Accident Compensation Corporation's unlawful levy and entitlement process.