IRD crackdown on tradies' cash jobs


The construction industry contributes billions of dollars to the New Zealand economy each year -- but it's also costing it too, as tradies continue to do 'cash jobs' without declaring tax.

"When we focus on this area and go after it we get tens of millions to hundreds of millions of additional income," Andrew Stott, from the Inland Revenue, said.

They launched a half-million dollar campaign last year targeting Auckland subcontractors doing 'under the table' jobs

Since then they've recovered between $60 - $150 million in lost tax.

On Monday they're launching another campaign - targeting the same group, using websites and radio

"If people aren't adding tax cost in, doing things on a cash basis it makes an uneven playing field," Grant Florence, Certified Builders NZ chief executive, said.

He supports the campaign but is concerned some people will do it regardless of the consequences.

A survey conducted following last year's campaign supports that concern.

Some tradies thought that more than quarter of Auckland construction jobs were paid under the table.

In all, 11 percent of tradies said they knew of cash jobs worth more than $20,000.

But the IRD says research also shows attitudes are shifting and more tradies think it's wrong.

Tax lawyer James Coleman says it's the right approach.

"Economists call it a moral hazard that they're trying to deal with that by making people realise there's a high risk they'll get caught."

And it won't be long before IRD widens its crackdown -- there are plans to extend the campaign next year and the hospitality industry and independent contractors will be targeted.

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