How the Tax Office got it wrong 24.11.2005
A number of clients of accounting firms have received letters from the Tax Office telling them they had to produce car log books for claims made in the 2005 income tax year.  
 
The correspondence incorrectly stated that a new log book had to be completed if they purchased a new vehicle during the year. This advice ignored a section of the Act which allows a taxpayer to nominate one car as having replaced another car, meaning that the original log book can be used for the replacement car. The Tax Office has now confirmed that letters will be sent to the affected taxpayers to rectify the problem.  
 
The letter in question should have stated that a new log book would be required for each additional vehicle rather than each new vehicle. Editor: It's nice to see the Tax Office admit their mistakes. It would be nicer still if they could accept that taxpayers sometimes make innocent mistakes and maybe should not be penalised either.

Click here to view our accounting news archive