$100,000 tax shortfall admitted

After receiving a warning from the Inland Revenue Department, a Christchurch company director continued not paying PAYE for his concreting business for another 21 months.

The result is a tax shortfall of nearly $100,000 and Duncan James Litten Clarke facing sentencing in the Christchurch District Court on August 17.

Clarke, of Avonhead, admitted 33 tax offences stretching from 2013 to 2016 when he appeared before Judge Gary MacAskill. The judge remanded him on bail and asked for a pre-sentence report that will consider his suitability for a home detention or community detention sentence.

Prosecutor Ron Lemm told the court that Clarke, a 47-year-old who is now a self-employed glazier, set up Clarrten Concrete Placing Ltd in 2011. He was the sole director and shareholder. The company began employing staff from June 2012.

The company was placed into liquidation in March 2017, on the application of the Commissioner of Inland Revenue, owing $640,480 in various types of tax, including penalties and interest.

For 33 monthly tax periods between May 2013 and February 2017, the company failed to account for a total of $381,185 for PAYE, KiwiSaver employee deductions, student loan employer deductions, child support employer deductions, KiwiSaver employer contributions, and employer superannuation contributions by the due dates.

Late payments totalling $192,712 were received, and the liquidator paid $89,550 to the commissioner, so the final tax not accounted for was $98,922.

Clarke was the person responsible for the tax payments. He was cautioned in a phone call, and by letter, but Mr Lemm said the non-payment of PAYE continued for another 21 monthly tax periods after the warning.

Bank account analysis showed that the company had enough funds to pay the taxes on 31 out of the 33 periods when the tax offending occurred.

When he was interviewed, Clarke said he did not understand how PAYE was calculated but he knew that deductions were due every month. He said it was his responsibility to pay it and he would do so if there was enough money available.

Clarke admitted the charges of aiding and abetting the company to apply tax deductions for purposes that were not payments to the tax department.


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