Taxi firm with no taxis claims $800k costs

A taxi company director who did not own any vehicles but claimed expenses of $800,000 over two years has pleaded guilty to 40 charges of providing false GST returns.

David Robinson, of Star Taxis in Napier, returned sales of more than $400,000 from unverified sources from 2012 to 2014, and claimed expenses of $800,293 over the same period.

The Inland Revenue Department began investigating the company, and others linked to Robinson, in 2013 after they were identified as being in a refund position.

Concerns were also raised when HBS Bank reported suspicious activity relating to one of the company’s bank accounts. Large cash deposits were followed by withdrawals soon after, or cash withdrawals from an ATM were followed immediately by deposits in a nearby branch.

It turned out Robinson had receipts for only $3913 in expenses, of which only $2460 was deductible.

A search of his vehicle ownership records showed he did not own any vehicles over the two years, apart from a flatbed truck for just over three months.

Robinson had claimed GST refunds of $50,900, of which IRD paid $46,881. None of it has been recovered.

When investigators spoke to one of the taxi drivers, she said she and another couple of drivers operated the company. They worked from home, kept their own fares, used their own bank accounts and were responsible for their own tax obligations.

She said Robinson’s only involvement had been in setting up the company and she was unaware it had a bank account.

Robinson had sole control of the accounts and most expenses appeared to be personal.

Star Taxis and Starhire employed five to 10 people. Napier Transport provided delivery services and Tui Transport was a vehicle hire business.

Robinson, 56, appeared in Napier District Court yesterday and pleaded guilty to 40 charges of providing false GST returns to the Commissioner of Inland Revenue in order to obtain a refund or payment of tax in the knowledge he was not lawfully entitled to it.

He will be sentenced in May at North Shore District Court.