Christchurch restaurateur Jonny Schwass has admitted misapplying tax payments totalling more than $300,000 before his company BTS Restaurants Ltd went out of business last year.
Forty-six-year-old Jonathon Charles Schwass pleaded guilty to 21 charges in the Christchurch District Court and was remanded for sentence on July 6.
Judge Simon Menzies asked for a pre-sentence report with an assessment of his suitability for home or community detention when he remanded Schwass at large — no bail was required.
Defence counsel Simon Shamy said Schwass was assisting with “other on-going investigations” and a large amount of money may be paid to the Inland Revenue Department before the sentencing.
Mr Shamy said Schwass had previously had interim name suppression but the order lapsed when he pleaded guilty and was not renewed.
Schwass put his Harlequin Public House restaurant and bar in the central city up for sale in 2016. He had established the restaurant in mid-2013 in the restored Ironside House, a large heritage weatherboard house on the corner of Victoria and Salisbury streets.
The two charges he admitted – containing 21 offences — involve aiding and abetting BTS Restaurants Ltd to misapply tax deductions or withholding tax that had to be paid to the Commissioner of Inland Revenue over 21 tax periods from 2015 to 2017.
The company was incorporated in July 2007 with Schwass as the director and shareholder. It owed about $700,000 when it was placed in voluntary liquidation on May 11, 2017.
At that time it owed $314,757 in taxes for PAYE payments, Kiwisaver, student loans, and child support deductions. Late payments of nearly $50,000 have been made since then and the outstanding balance is $265,689.
Employees will lose $13,870 for unpaid Kiwisaver contributions.
When interviewed, Schwass acknowledged that he was ultimately responsible for the company’s trading activities and finances and was responsible for the company’s PAYE compliance.
He was warned by the tax department by letter and verbally.
When he was interviewed in August, he said the tax money had been used for operational expenses and priority had been given to trade creditors.