IRD has made no secret of its efforts to crack down on the "hidden economy".

In its last annual compliance focus report, it said cash jobs and other tactics to suppress income were again in the firing line. Group Manager Assurance Martin Scott said the hospitality trade had been a focus for the past two years. "We have identified cases where reported sales and income are well below what we would expect.  "We use information from a range of sources, such as the analysis of sales levels and margins, to establish businesses most likely to be non-compliant. We provide them with an opportunity, where appropriate, to explain any anomalies or provide evidence for their position that may result from legitimate reasons."

In response to the claim that immigration officials had been present on one of its visits, Scott said IRD did not involve other government agencies in such work but in exceptional circumstances where there were security concerns IRD staff might be accompanied by police.