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ACC Fails to Implement the Will of Parliament

#161 User is online   MINI 

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Posted 18 August 2017 - 04:46 PM

View PostAlan Thomas, on 18 August 2017 - 12:01 PM, said:

Mini a person who is in business by themselves (self-employed) is therefore a "sole trader". The tax department does not create a mechanism by which such a person can employ themselves.

I was not making any reference to a company yet if a person did set up a company and was self-employed within the context of that company yes of course then they could employ themselves in as much as they would be the director and then the director would write up an employment specification then appoint them self for example as the manager to run the company and therefore become employed, pay PAYE and suchlike.

Your suggestion that the company owner and directors need to obtain the IRD permission is complete nonsense. I've never heard anything so ridiculous.
The way in which the company is run is completely up to the director who must obey the shareholders while at the same time complying with various directors duties such as ensuring that the company remained solvent. Apart from that in this country we have a high level of freedom.

With regards to remuneration that is entirely up to the director regarding directors fees and suchlike. In the same persons capacity as the manager they of course with them set their own remuneration. Generally such people take the advice of their accountant with regards to what is appropriate but there is absolutely nothing to stop a person mortgaging their home and then paying themselves $200,000 a year and then running that company into the ground. That is entirely their own business so long as they close the company's doors prior to becoming insolvent. In the event that the person has an accident during the course of this $200,000 per year employment the ACC could very well take the matter up but paying oneself a high amount from money that you have total control over and the which you own there is no possibility of that ever being fraudulent in itself. Obviously a person would not be aware that they were going to have an accident and so that would not be fraudulent against the ACC. The ACC however may argue that the person was not being paid an amount consistent with the qualification,, experience and skill but that would be an argument they lose and the courts as consistently the ACC has been losing such arguments. And in particular the ACC has lost the flip side of the argument, one of which I instructed the QC on the law this matter, when representing someone the acc have prosecutors successfully for fraud because in the ACC's view the fellow owned a multimillion dollar company,, who became injured and while receiving earnings compensation working part-time on light duties he was only paying himself a rate consistent with a roustabout/cleaner/lunch lady when the ACC's viewpoint was that he should be receiving a managerial salary and had conned the criminal court in to believing that the ACC had a firm basis in law for a conviction. The Queen's Counsel represented my research and got the fellow out of prison on appeal. It is these and others that I've helped that has caused the ACC to take such a violent stand against me. Nonetheless I am invariably correct in my comprehension of the legislation in such matters.


Thomas

just because you think something I know is right, is ridiculous, because you say that too me knowing I have had many more years than you of accounts, paye, Taxation and the law that goes with it.

I have audited such companies and my brother had such a company and what I am saying is the truth. Of course it does not take the responsibility away from the same person who is 99-100% shareholder and Director. But it does mean he has less tax to pay at the end of the financial year for the company as he personally have already paid a heap during the year as PAYE.

You probably have not heard of it because you need to be of the best of characters to get IRD's OK and of course the fact that that you do it shows your intention to make a profit and pay more tax on income at the end of the year.

There is a hellva lot you don't know about business isn't there. But then, you have already said loads of times that you had an accountant do it. Gosh, my son was doing his own tax, GST, Provision and Income tax and has done so for many years. He puts his own company accounts in and only used to get advice off me occasionally.

Mind you he only had and needed one company because he like his mother don't mind paying the tax that we have too. It is all quite simple when you follow the rules.

Mini
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#162 User is online   MINI 

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Posted 18 August 2017 - 04:53 PM

View PostAlan Thomas, on 18 August 2017 - 12:36 PM, said:

Clearly you have not read my thread but perhaps you should and then address such comments as this one on that thread as you are now getting off topic.

However with regards to this topic the measurement of legal precision has nothing to do with the competency of legal representation or even the judge, which is the reason why we have an appellate system and even then the system still is not infallible.

With regards to percentage of ttimes someone wins cases, such as these technical matters within this thread, I think it would be fair to say that John Miller would be one of the most competent legal representatives on ACC matters in the country yet here my enjoy about the same percentage of cases found in our own favour, about 30%. This does not mean that we are equal is obviously I don't know a fraction of what he knows.. Therefore we can only conclude that something else is going on that influences the disproportionate nature of ACC judicial decision-making processes. It was him that brought this to my attention and his explanation was that ACC throw far more resources against him than for example and individual on their own regarding a simple matter. He acknowledged that tthe longest case that he is ever processed in the district court was only about a week while I had gone beyond six weeks in one case and that he is never had more than one lawyer going up against him what I have had ACC feel that they needed to have three ACC lawyers in the court room going against me. He described this as the way in which ACC bring more of their resources into play to overwhelm their target. So Mini given the way in which the ACC is functioning your rationale is wrong.


alan Thomas
What has john Miller got to do with Lupins case?

Mini
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#163 User is offline   Alan Thomas 

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Posted 18 August 2017 - 05:38 PM

View PostMINI, on 18 August 2017 - 04:46 PM, said:

Thomas

just because you think something I know is right, is ridiculous, because you say that too me knowing I have had many more years than you of accounts, paye, Taxation and the law that goes with it.

I have audited such companies and my brother had such a company and what I am saying is the truth. Of course it does not take the responsibility away from the same person who is 99-100% shareholder and Director. But it does mean he has less tax to pay at the end of the financial year for the company as he personally have already paid a heap during the year as PAYE.

You probably have not heard of it because you need to be of the best of characters to get IRD's OK and of course the fact that that you do it shows your intention to make a profit and pay more tax on income at the end of the year.

There is a hellva lot you don't know about business isn't there. But then, you have already said loads of times that you had an accountant do it. Gosh, my son was doing his own tax, GST, Provision and Income tax and has done so for many years. He puts his own company accounts in and only used to get advice off me occasionally.

Mind you he only had and needed one company because he like his mother don't mind paying the tax that we have too. It is all quite simple when you follow the rules.

Mini


There is tax evasion and then there is tax avoidance. I pay highly qualified people that would be far more qualified than you and those who managed to to ensure that I paid the littlest tax possible legally.. With regards to my senior staff likewise they would far rather have tax-free earnings while at the same time ensure that they are fully insured under the ACC scheme. I'm confident that what I have said is precise and accurate with regards to the PAYE relationship to the ACC legislation concerning earnings related compensation matters. In other words I pay people to make sure I paid the right amount of tax and that the IRD did not overcharge through bureaucratic bungling.

I don't know where you get the idea that I don't know much about business as I was even selected to be a business mentor for business mentors in the community.. I came across all manner of ridiculous schemes posed by the ACC for injured people who had business proposals seeking to get back to the workplace and as such I think I have a reasonable handle on the whole sticky mess.

Mini this topic is not about tax but rather about ACC calculating the right amount of earnings compensation for business owners. What Lupin has highlighted Is one of a very large number of dirty deeds done by the ACC to screw injured claimants that can ill afford to be screwed,, particularly those who are the heroes in our community that create businesses and jobs.
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#164 User is offline   Alan Thomas 

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Posted 18 August 2017 - 05:38 PM

View PostMINI, on 18 August 2017 - 04:53 PM, said:

alan Thomas
What has john Miller got to do with Lupins case?

Mini


We were talking about the way in which people recognise technical expertise regarding the ACC including this complex legal argument being prepared by Lupin. I was pointing out that those at the higher level of legal competence regarding ACC matters end up having greater resources being brought against them by the ACC whereby they don't necessarily have a higher chance of success. I'm sorry I try to word my posting so a seven-year-old can understand. Would you like me to make it easier for you.
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#165 User is offline   Alan Thomas 

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Posted 18 August 2017 - 05:48 PM

Post 158 & 159 reported for being off topic. Thank you Lupin, perhaps they will take your advice as well.
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#166 User is online   MINI 

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Posted 18 August 2017 - 05:51 PM

View PostLupine, on 18 August 2017 - 02:54 PM, said:

AHEM!

If we could all return to the matters at hand being:

Protecting the rights of thousands of unpaid claimants and holding the Corporation accountable I would be incredibly grateful.

lupine

With you 100%.

Would you agree that we have established the rules for:

a clause 39 shareholder-employee and clause 40 And we are only looking at:

b clause 37 And 38. section 14

If this is correct I would like you to let me know and give us some more knowledge of the years and the figures that make up each year, so it will be easier to see where your discrepancy is. Once I know that then I will be of great help to you.

At the moment it is like pulling teeth as in your concern of letting too much information go and identifying the claimant, rightly so I should say, put there are ways of putting a scenario that will not identify the claimant.

Think about it and let me know please.

Mini
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#167 User is offline   Lupine 

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Posted 19 August 2017 - 03:32 PM

I am starting to reach the conclusion that a 38 (2)( b ) and 39 (2) ( b ) claimant is likely a claimant who has a later roll over date than April 01.

Example:

Claimant starts business in July 2016. Has an agreed end of year date with IRD of July 30 2017. Has an accident in March 2017. When it is tax time and all the information goes in in July then ACC make a calculation (at least that is what one assumes ACC does because who knows really). But this calculation occurs in what ACC would consider the next financial year. If the claimant had an April 01 date as per tradition then they would be an "A" claimant (HA!)

So as this more unusual class of earner has a "relevant" year that is not in line with the financial year then it would seem that "B" would cover this.


I am assuming.
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#168 User is offline   Grant-Mac 

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Posted Yesterday, 09:02 AM

View PostLupine, on 18 August 2017 - 10:45 AM, said:

Let us think about this.


This brings me to a question for Grant. I cannot get my head around what qualifies a claimant as a "B" claimant. Input would be appreciated.


I'm assuming 'B' is:

Quote

earnings means—
(a) earnings as an employee:
(b ) earnings as a self-employed person:
(c ) earnings as a shareholder-employee


Is that correct with regard to your question?

Grant
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#169 User is offline   Lupine 

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Posted Yesterday, 10:18 AM

View PostGrant-Mac, on 21 August 2017 - 09:02 AM, said:

I'm assuming 'B' is:



Is that correct with regard to your question?

Grant


The formula is correct but my focus is on the application of the "Relevant Year". The Relevant Year requirement is in "C" but "B" is focused on it as well so clearly the legislators envisaged two sub classes of self employed earners that rely on the same consideration. So what then distinguishes a "B" from a "C"?

Is it when a claimant has a different financial year ending date than April the 1st or some other consideration?



( b ) for claimants for whom the relevant year was the first year during which they received earnings as a self-employed person, the amount calculated using the following formula:


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#170 User is offline   Grant-Mac 

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Posted Today, 06:29 AM

View PostLupine, on 21 August 2017 - 10:18 AM, said:

The formula is correct but my focus is on the application of the "Relevant Year". The Relevant Year requirement is in "C" but "B" is focused on it as well so clearly the legislators envisaged two sub classes of self employed earners that rely on the same consideration. So what then distinguishes a "B" from a "C"?

Is it when a claimant has a different financial year ending date than April the 1st or some other consideration?



( b ) for claimants for whom the relevant year was the first year during which they received earnings as a self-employed person, the amount calculated using the following formula:




The 'Relevant Year' is given its meaning in Schedule 1 clause 30(1) and (2)

(1) In this Part, relevant year means the most recent tax year (as defined in section YA 1 of the Income Tax Act 2007) last ended before the commencement of the period of incapacity.

(2) However, in the case of a self-employed person or shareholder-employee, the relevant year is the most recent year ending with the balance date (whether 31 March or another date) of the self-employed person or shareholder-employee before the commencement of the period of incapacity.


Therefore, if I am a self-employed person as defined by (2), and my financial statements are prepared and submitted on [as an example] 1 June consistently, due to vagaries of my business, then the 'relevant year' for me is if injured today and incapacitated:

2015.....1 June
2016.....1 June
2017.....1 June

Is 2016 1 June. This is because 2016 is the most recent, full tax year available for which a return has been submitted to IRD. My 2017 tax return will be made by 1 June 2018. Therefore, if injured today, the most recent year is 2016.

31 March is mentioned only because that is for the vast majority of businesses, the ending of the 'tax year'. So for the current year, 2017, the tax year ends 31 March 2018.

Grant
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#171 User is online   MINI 

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Posted Today, 11:27 AM

Grant

I have read somewhere in amongst this thread and the Act the end of the year for calculation purposes may be a year that is not ending either of the two standard tax years. If for instance you have your injury now I was of the belief that your relevant year could be the DOI added back for 52 weeks, or however many weeks that particular year has had. This would mean you year ending tax date maybe be march or june but it would be over run, by the latest full year to your date of incapacity. That would be as mine was done by ACC.

Those year endings are only used because they would probably have their returns in for each year. BUT that cannot always be relied on. As seen by the case law Lupine was reading, the returns were not in for him recently, that is probably because he was on wages for one of those years.

I would not expect my year to be taken other than 52 weeks back from DOI (or incapacity) as it would mean that ACC only had part of a year if taken from now (DOI) to June or March of this or next year.

I would also look at the meaning of "Provisional" Taxpayer in 1994 Act and 2007 Act as that in the 1994 Act is what a self employed person was. For themselves they must present a tax return in the first year of business so that a 'reasonable' amount can be set for their income, to be paid three times a year to the IRD. It is then balanced at the end of the financial year, to make it a closer amount to the true amount that they should be paying.

So if you take these points into consideration, if still in vogue in the 2007 Income Tax Act. You will be able to have some points to argue Lupine. (Sorry I started speaking to Grant, but see that it is Lupine that needs to take these points into consideration.)

Mini
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#172 User is offline   Alan Thomas 

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Posted Today, 11:32 AM

View PostLupine, on 19 August 2017 - 03:32 PM, said:

I am starting to reach the conclusion that a 38 (2)( b ) and 39 (2) ( b ) claimant is likely a claimant who has a later roll over date than April 01.

Example:

Claimant starts business in July 2016. Has an agreed end of year date with IRD of July 30 2017. Has an accident in March 2017. When it is tax time and all the information goes in in July then ACC make a calculation (at least that is what one assumes ACC does because who knows really). But this calculation occurs in what ACC would consider the next financial year. If the claimant had an April 01 date as per tradition then they would be an "A" claimant (HA!)

So as this more unusual class of earner has a "relevant" year that is not in line with the financial year then it would seem that "B" would cover this.


I am assuming.


Just follow what the legislation says and you will have a clarity of understanding


30 Meaning of relevant year
(1) In this Part, relevant year means the most recent [tax year] (as defined in section OB 1 of the [Income Tax Act 2004]) last ended before the commencement of the period of incapacity.

(2) However, in the case of a self-employed person or a shareholder-employee, the relevant year is the most recent year ending with the balance date (whether 31 March or another date) of the self-employed person or shareholder-employee before the commencement of the period of incapacity.


Clause 30 was amended, as from 1 April 2005, by s YA 2 Income Tax Act 2004 (2004 No 35) by substituting the words “tax year” for the words “income year”. This is as a result of people confusing earnings with income.


Clause 30 was amended, as from 1 April 2005, by s YA 2 Income Tax Act 2004 (2004 No 35) by substituting the words “Income Tax Act 2004” for the words “Income Tax Act 1994”. Please note that the language used in the income tax act does not apply to the language used in the ACC act concerning identifying earnings as earnings under the ACC legislation is not the same thing as income.


s 6 “incapacity”, “income year”, “self-employed person”, “shareholder-employee” s100 entitlement to weekly compensation depends on claimant’s incapacity for employment and vocational independence

s 101 procedures for determining incapacity for employment and vocational independence

ss 102-106 incapacity for employment

Income Tax Act 1994 (1994 No 164)

s OB 1 definitions

IPSch1.30.01 Legislative background

This clause is based on cl 5 of Schedule 1 of the 1998 Act and s 42 of the 1992 Act.

IPSch1.30.02 Date of commencement of incapacity

The date of the commencement of incapacity is important because it establishes the relevant year for determining entitlement. “Incapacity” is determined under s 103 or s 105 and means inability to engage in the employment in which the person was employed when he or she suffered the personal injury. If the balance date for a self-employed person or a shareholder-employee is 31 March and the person was incapacitated on 29 March, the “relevant year” will be the year ended 31 March in the previous year. This is notwithstanding that the virtual completion of the current financial year when the incapacity commenced. If incapacity had commenced on 1 April, then the “relevant year” would be the year ended the day before, that is, 31 March. Because of the statutory definition of “relevant year” the Corporation has no discretion to look at the actual loss incurred by a self-employed person or shareholder-employee.

Regarding earnings as a self-employed person under the 1992 Act

In Boe v ARCIC 1/2/95, Judge Ongley, DC Palmerston North 5/95, the appellant had been in partnership with the deceased in a painting and decorating business. At the time of his death on 22 October 1992, the deceased’s last return of income had been filed for the year ended 31 March 1992. A new set of accounts had been prepared up to the date of death and it was argued that the most recent income year before the commencement of incapacity was the year ending 31 March 1992. It was also argued that dividing the income returned by the number of weeks in the period from 1 April 1992 to 22 October 1992 should account for the calculation for weekly earnings for the purpose of s 41 of the 1992 Act.

The Court said:

“Section 41(2)(B) designates relevant earnings as the earnings ‘in the most recent income year (as defined in section 2 of the Income Tax Act 1976) last ended before the commencement of the period of incapacity as shown in an income tax return, divided by the number of weeks in that income year’. The subsection does not only refer to ‘the most recent income year . . . last ended’. A ‘year’ or ‘income year’ as defined in s 2 of the Income Tax Act 1976 ends with the 31st day of March. The ordinary meaning of the subsection is that the relevant year is the year which ended with the 31st day of March last before the date of incapacity.

“The period is different from the period shown in the section heading and in subsection (1). The effect of subsection (1) is to apply the section only to earners who had earnings other than earnings as an employee and who did not have earnings as an employee during the 12 months immediately preceding the commencement of the period of incapacity. It might be expected that the same period would be taken in order to ascertain weekly earnings, but that is not the case . . . When ss 40, 41, and 42 are read together a pattern emerges. First the period of 12 months before commencement of incapacity is used to classify the claimant as an employed earner, non-employed earner or an earner from mixed sources. The calculation of earnings is then made by using periods for which income earned can be easily ascertained. In the case of employed earnings the same 12-month period is taken and a weekly average obtained. In the case of non-employed earnings the most recent income year under the Income Tax Act 1976 is taken and a weekly average obtained. In the case of mixed earners, both calculations are made and added together to produce a kind of adjusted average weekly income as if the two different calculation periods coincided. When this pattern is recognised there is no apparent reason to depart from the ordinary meaning of subs (2)(B).”

For other cases under the 1992 and 1998 Acts where the end of the financial year immediately before the commencement of incapacity determined entitlement, see ACC v Bridges 4/5/00, McGechan and Gendall JJ, HC Wellington AP310/99, ACC v van Der Coer 30/8/00, Morris J, HC Auckland AP33/00, Beatty v HIH Workable Ltd 18/12/00, Judge Beattie, DC Napier 340/00, Dean v ARCIC 2/3/00, Judge Barber, DC Wellington 32/00, Erceg v ARCIC 21/7/00, Judge Beattie, DC Auckland 182/00, and Windle v ACC 19/4/04, Judge Barber, DC Christchurch 104/04. See also Nielsen v ACC 31/7/06, Judge Cadenhead, DC Wellington 190/06 where the Court acknowledged that by applying the “bright line rules” an injustice had been produced and an artificial and unfair result ensued.

Grant I trust that this will assist you with your understanding as well.
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