Quakes blamed for $100k unpaid tax

Tough times after the Christchurch earthquakes have been blamed for a company’s failure that led to nearly $100,000 in unpaid tax and a home detention term for its director.

Duncan James Litten Clarke, 47, of Avonhead, will also have to repay about half of the unpaid tax, and complete 150 hours of community work.

Christchurch District Court Judge Tom Gilbert said at Clarke’s sentencing that he had ‘‘let the community down with this offending’’.

He told Clarke: ‘‘It seems likely that when creditors were calling for funds, you took the view that the Commissioner of Inland Revenue was the last in line.’’

Clarke set up the concreting business Clarrten Concrete Placing Ltd in 2011. He was the sold director and shareholder.

The company was placed into liquidation in March 2017, on the application of the Commissioner of the Inland Revenue Department. It owed $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 the department 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.

Defence counsel Richard Hearn said there had been a significant number of company failures in the aftermath of the earthquakes of 2010 and 2011.

‘‘A lot of PAYE was paid late because of drip-feed payments from major contractors.’’

He said Clarke had been on a salary and had made no personal gain. Clarke had paid $25,000 into the law firm’s trust account as a contribution to reparations.

Inland Revenue senior prosecutor Paul Saunders rejected any suggestion that non-payment of PAYE was ‘‘a technical matter’’. It was money that was held in trust by the firms, he said.

Judge Gilbert noted that Clarke had been warned by Inland Revenue about the nonpayments but the defaults had continued for another 21 months.

Since then, Clarke had been put out of business, had been banned as a director, and was soon to be bankrupted by the tax department.

He ordered Clarke to be placed on home detention for six months, do 150 hours of community work, pay $25,000 supplied by his family as reparations immediately, and pay another $100 a week over five years.

Clarke is now starting work as an employee of a concrete placement and landscaping firm.

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