Plz help me Review Received Refusal Letter

[chandu2004]

Hi Guys,

This is classical example of HO. I applied for HSMP under independent contractor and I submitted Contracts,Invoices,bank statements,Gross Annual letter and letter from Accountant as i don't have tax return.

The Refusal letter from HO is as follows, am copying the exact text they send me

1) We note that you have claimed 45 points for earnings derived from employment as an Independent Contractor over the 12 month period from June 2006 - may 2007

2) In order to score points as an Independent Contractor you are required to provide invoices,bank statements and contracts which cover the 12 month period as well as your most recent tax return.

3) Alternative evidence can be provided in support of this section should you not have one of the aforementioned documents, however in order to do so you must request exceptional consideration and provide a sufficient reason why you are unable to provide one of the aforementioned documents.

4)Whilst we note that you have provided invoices,bank statements and a contract from XXXX Company Ltd, which all corroborate and demonstrate that you have earned over 17,500 Pounds, you have failed to provide your most recent tax return.

5) A letter from you accountant as been included in support of this section as an alternative to your tax return.how ever the HSMP guidance states that we require your most recent tax return.

6) You have failed to state why tax return could not be included with your application and there fore as per the HSMP guidance we have been unable to assess the letter from ABX Taxation Services Ltd.

I am planning to apply for review as I am really confident with the help of board members and admins, I want a technically sound reason for not submitting tax return.

My Tax return starts from April to March 2007. Can plz someone point it to me, what should i write the reason in the covering letter for not submitting tax return.

plz help me with this review letter.

Thanks a lot

Chandra

[gordon]

Why did you not provide your most recent tax return with our application ? Was it that (a) you hadn't one, or (b) it did not cover the period claimed ? In the latter case, you should have submitted the tax return and then explained that it covered a period other than the period claimed in the application. AG

[Kaff]

Chandu,

I think for independant contractor they need IRD report for tax return issued from government body.
tell me one thing, did you paid Tax to IRD for the same period and for the same earning?
Or
You have should less to IRD to avoid tex cuts?

Not sure how can you skip from Tax return in that case..

Senior please help him to put togather a solid review....

[chandu2004]

Hi Gordon,

Thanks for your prompt reply. I din't had the tax return as my tax agent or accountant has not filed for my tax returns yet, thats the reason I attached accountant letter showing gross earnings and net earnings for the period.

Thanks

Chandra

[chandu2004]

Hi Kaff,

Thanks for your reply mate. I won't be paying tax for my whole earning as I got few properties where in we can get some tax benefits and those expenses will be deducted from my earnings.

Example

Say My Earning is 1,00,000
Business Expenses 10,000
Depreciation 5,000
Misc 2,000

Earnings after deduction would be 83,000

But the thing is HO wants a solid reason for not submitting tax return. Seniors plz help me to put together a solid review.

Thanks

Chandra

[gordon]

The tax return that the HSMP caseworkers required would be the document that x Company Ltd provided you at the end of the most recent tax year indicating how much they had paid you in that tax year for the work performed, not your self-assessed tax form where you indicate your tax-deductible expenses. What was the reason that you did not submit the former ? AG

[chandu2004]

Gordon,

Thanks for your reply but the problem is my employer won't be paying any tax for the work I perform as I am a contractor not an employee. I have to pay all the tax at the end of the year.

I can't provide them the tax return as my tax agent has not filed my tax return.

Gordon I will explain you my scenario

Let's say, I get paid 10,000 a month so my yearly income would be 1,20,000 Dollars and I have to pay tax for 1,20,000, which my tax agent files tax return after an year or so as the tax agents have extension of time for applying my tax return.

So, I want a solid reason for telling HO the reason for not submitting tax return.

Thanks gordon

Chandra

[gordon]

You're referring to the wrong form, so we're not talking about the same thing; HSMP do not want the self-assessed forms. I've worked as an independent contractor, and the contracting agency gave me a tax return at the end of the tax year. All it showed was the gross amount they paid me; they did not pay tax on my behalf or withhold any tax. Where's your equivalent of that document ? (I later paid my taxes myself, using the self-assessment forms, such as what your tax agent would file on your behalf, after accounting for my eligible deductions, including expenses, following the end of the tax year.)
AG

[chandu2004]

Thanks gordon. I got it now, I submitted an earnings document signed and stamped from my employer to the UK head office, which shows gross earnings for each month paid by the employer to me for the period I claimed (June 2006 - May 2007) and also submitted Stamped and Signed Invoices from my employer which showed my gross earnings for each month but the head office wants the reason for not submitting tax return.

In NZ, we wont' get any sort of documents or Tax Returns from the employer, if u r working as an Independent Contractor. We can request the documents like Gross Earnings document like which I requested them and they gave it to me and I submitted that proof as well to the HeadOffice.

I submitted the all the documents related to the gross amount my employer paid me like Gross Earnings document, Invoices showing the amount, Contracts and Bank Statements and also letter from my accountant showing the Gross salary for the period claimed.

I hope I am clear this time.

Thanks for ur responses. very much appreciated

Chandra

[gordon]

Thanks gordon. I got it now, I submitted an earnings document signed and stamped from my employer to the UK head office, which shows gross earnings for each month paid by the employer to me for the period I claimed (June 2006 - May 2007) and also submitted Stamped and Signed Invoices from my employer which showed my gross earnings for each month but the head office wants the reason for not submitting tax return.

In NZ, we wont' get any sort of documents or Tax Returns from the employer, if u r working as an Independent Contractor. We can request the documents like Gross Earnings document like which I requested them and they gave it to me and I submitted that proof as well to the HeadOffice.

I submitted the all the documents related to the gross amount my employer paid me like Gross Earnings document, Invoices showing the amount, Contracts and Bank Statements and also letter from my accountant showing the Gross salary for the period claimed.

I hope I am clear this time.

Thanks for ur responses. very much appreciated

Chandra

I think, then, in your review that you will have to explain that the clients or contracting agencies do not provide a tax return to independent contractors at the end of the tax year. You may want to include a link to the relevant tax code explaining this practice. AG

[chandu2004]

Hi Gordon,

Thanks for your reply. Any one any more suggestions.

Thanks

Chandra

[chandu2004]

Hi Gordon,

I looked at the IRD government taxation site but to my dissatisfaction can't find any information of not following that practice.

Can u plz help me with the solid reason for not submitting tax return. Like in plain words, what would you write to headoffice for not submitting tax return, if it was you in my place?

PANEITAMA and OTHER BOARD MEMBERS PLZ HELP ME WITH THIS REVIEW.

Thanks

Chandra

[Kaff]

Chandu,

Let me get this clear, if you are working as Independent contractor, this means you don't have to PAY TAX?
At any stage in New Zealand, if you are earning x amount of money regardless of which you earn, you have to pay tax. UNLESS You have a side business (real estate or xyz) where you can balance your earning with Loss or expense.

Now my suggestions are..

1. Either prepare that sort of document and get that on paper from IRD?
OR
2. Pay the Tax for that period and get Tax return statement.

Please do talk to IRD on phone, they will guide you better on phone.

Hope this helps.

[chandu2004]

Hi Kaff,

Thanks for your response. But the thing is I can't provide any additional documentation for my review.

Is it ok, if I can provide with this new information with my review.

Thanks

Chandra

[Kaff]

No, you can't that's right.
If you do get Tax return, then you will be applying as a new application!

For your review, you have to justify using your words.. and I can't see any justification you can give to get away from Tax return on words.

Better idea to get your documents put togather and apply again.

Sorry mate..

[gordon]

Then you'll need to explain that the income statements filed for the 06-07 tax year, had not yet been endorsed by the tax authority when you made your initial HSMP application. That appears to be your argument; nonetheless, the caseworkers otherwise would have wanted to have seen the endorsed return for the 05-06 tax year, in the absence of that for 06-07. AG

[SYH]

HI chandu
You have sent me a personal plea, from my point of view, I am not sure you are versed with the terminology that you are responding appropriately. If these are agencies, then there would be a contract or assignment schedule and you would have invoiced them, right? If its an employer, then they have to provide a document showing what they paid you regardless if they paid your taxes or not. As for submitting the latest tax form, I am not versed in the NZ system to know for sure if you are providing the most complete info. In the US we get W2, the employer send it to us, stating what we paid, which sounds similar to what your submitted. We also file tax returns. You claim you didn't have it yet for this year because it wasn't complete, but you should have submitted what you had from the year before. I myself have a limited company and I was paid a salary without tax because I didn't reach the threshold to pay tax, however, I as a company generated a p60 which is probative for the HO to determine what I earn. The story we are getting from you is in fragments and I haven't figured out where you stand in terms of what available forms you have because of what the NZ calls it from what the UK might call it.
Try to list out down the line all the forms and returns available to you and we can try to sort you out

[chandu2004]

Hi,

Thanks gordon for your reply and Thanks SYH for responding to my personal request.Yeah you are right. I have a contract with the employer and I submitted the contract to the Home Office and yes I have Invoices and I did send the Invoices to the Home Office.Regarding ur comment, If its an employer, then they have to provide a document showing what they paid you regardless if they paid your taxes or not.I submitted a document from my employer showing gross earning details showing each month gross salary and Total Gross Salary for the period claimed. Yeah u r right, I have n't submitted tax return for this year yet but I dint know that I had to submit tax returns for the year before which sounds ridiculous becoz it would from April 2005 - March 2006 and I am claiming earnings for the period June 2006 - May 2007.

The only form available for me or my tax agent would be called IR3 Tax return to file tax returns from NZ for Independent Contractors or Salaried Employees.One other thing,if u notice in the refusal letter is, I din't hadmy tax return thats the reason I submitted my Accountant letter showing gross and Net earnings for the period claimed which matches the same figure as my employer's gross salary letter.One other point from Refusal letter is HO wants me to give the reason for not submitting tax return and also y i dint claimed Exceptional Consideration. I din't claimed Exceptional Consideration as there was no place to put reason for claiming Exceptional Consideration for Independent Contractors.

[gordon]

Even if you don't (or can't) request exceptional consideration, you would have had to have submitted all of the four items requested of independent contractors, including the most recent tax return, if not also the accountant's letter. It sounds like you would never have been able to submit a tax return covering the period claimed (because of the processing time for tax returns to be endorsed in your country), but that would then have meant submitting the 05-06 tax return, as the most recent endorsed one available, indicating in a covering letter that its contents were not relevant to the application. Nowhere in the guidance notes does it suggest that the accountant's letter may substitute for the tax return (for whatever period).

The guidance notes request that tax return, even if it doesn't cover the period in question. Indeed, had I been in your position, I would have included the endorsed 05-06 tax return as well as a copy of the unendorsed 06-07 tax return. It may seem silly to submit a tax return that doesn't overlap with the earnings period claimed, but unless I miss my guess, their review of the tax return is as much about the figures indicated as it is about the legitimacy of your financial arrangements.

While you can certainly discuss the issue of time-lags in your review, I'm not optimistic that it would obviate the stated need for you to submit the earlier tax return. That said, however, if you submit a fresh application, you might do well to submit everything as requested in the guidance notes, and then have better chances of passing through.

AG

[chandu2004]

Thanks gordon for your reply. I will be looking into it.

Cheers mate for all your time

Have a nice day

Chandra