arrears

i've done a couple of posts at the hand mirror - one yesterday about the marigold hotel movie and another today on the free advertising given to lotto by all our major media.

i'm looking forward to the long weekend - i'm feeling like i need a break. i won't be getting one on friday as i'll be in a strategic planning meeting all day. but the rest of the break should be spent relaxing and catching up on a few things.

march & early april tends not to be a fun month at work either. this is the time when we do the accounts of all the stragglers, the people who don't bother to keep proper records and who need to be constantly reminded to bring in their papers. they tend to have lots of arrears of tax, building up with interest and penalties. the saddest thing is that some of them are earning a good amount of money. they just don't have the discipline to put aside a reasonable chunk of it to pay their GST, income tax and often their student loan.

i often wonder how people can put aside their legal obligations, or just not worry about them. i can understand those living in poverty having little choice, as they struggle just to get food on the table or to keep up with monthly rent payments. but those people aren't the ones that generally have heaps of tax arrears.

it's more likely to be the self-employed professional that has the big arrears. often it's because they didn't start saving for taxes in their first year of operations. then in the second year they get hit up with 2 years of taxes in one year as they pay for the year that's gone, then have to pay in advance for the year ahead. or it's because they've had a surge in business income, but didn't connect that to the fact that they are also going to have a surge in income tax.

once they're behind on the income tax, they quickly fall behind on GST, and then i don't know. it's like they mentally give up, and think they will never manage to get it paid so don't even try. it's sad to watch it happening and frustrating as well, because they tend to reject budgeting advice and don't want to change the way they're living.

banks often tend to be complicit - they will keep lending out extra money to the maximum limit. the banks only care that the person is keeping up with interest payments, they don't care what's happening with the taxes. and of course banks are much more ruthless than the IRD, and much better at getting what's owed to them.

so it's all a little depressing. but towards the end of april, the clued-up business people start bringing their papers in and it gets more positive. having tax to pay is actually a good thing - it means you're earning money. people tend to forget that.