Professional man admits $402,000 tax offences

A Christchurch professional man has been given 10 days to tell his clients that he has admitted tax offences totalling $402,000 before his name suppression lapses.

The 43-year-old pleaded guilty to seven representative charges on the day his judge-alone trial was due to start in the Christchurch District Court on 152 offences under the Tax Administration Act.

The trial before Judge Stephen O’Driscoll did not get started because agreement was reached in discussions in chambers at 10am.

The court reconvened four hours later when Inland Revenue withdrew the 152 charges and replaced them with the seven representative charges relating to non-payment of tax deductions. The man then pleaded guilty.

Judge O’Driscoll remanded him on continued bail to September 14 for sentencing. He asked for a pre-sentence report to assess his suitability for a home or community detention sentence.

The man has had interim suppression as the case went to trial, and defence counsel Jonathan Eaton QC asked for the order to be continued today for another 10 days, to allow the man to contact clients about his convictions. Some of them are out of New Zealand.

Mr Eaton said if any significant issues arose during that period it would be up to the defence to initiate further action – an appeal to the High Court for the suppression to be continued. Otherwise, it is due to lapse at noon on June 28.

Inland Revenue Department Senior prosecutor Paul Saunders said the charges related to seven companies which had gone into liquidation. The man was a director and joint shareholder of each of the companies, along with another person, either in his own name or through a family trust.

The companies ran businesses around Christchurch between December 2010 and June 2014.

Each of the companies was required to account to the Commissioner of Inland Revenue for tax deductions made from employees’ wages and for other deductions. These included PAYE, Kiwisaver employee and employer contributions, child support deductions, student loan deductions, and superannuation contributions.

Mr Saunders said the total amount of the deductions that were not paid to the commissioner over the three-year seven-month period was $402,441.

The man was the person responsible for filing the PAYE returns and had the ability to make the payments. He said in a telephone conversation with a tax department officer that he was fully aware of his obligations. He said he had previous experience as an employer and was fully confident in his obligations as an employer.

He later told the department that “things had got out of hand since the Christchurch earthquake”.

The man has been a director of 34 companies.

He pleaded guilty to charges referring to each of the seven companies now in liquidation, admitting that he aided and abetted the companies to apply tax deductions for purposes other than payments to the tax deparment.

Mr Saunders said the man had been previously convicted of four offences of failing to file financial statements under the Financial Reporting Act, and was fined $35,000. The Ministry of Justice says it does not have a criminal history for him, but the tax department says it holds the sentencing notes for the prosecution.

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