Employer accuses IRD of vendetta against him

TOM HUNT
Last updated 05:00 23/12/2013

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An employer with 80 jobs on the line is accusing Inland Revenue of a vendetta to jail him, despite his offer to pay the nearly $200,000 he owes.

A Court of Appeal decision this week means Stuart David Easton could now be jailed for failure to pay the employees' tax PAYE.

"If they did that, I would give up," Easton said. Earlier this year he was sentenced to fines and reparation for failing to pay almost $200,000 in PAYE to Inland Revenue but the court is now sending him back to be sentenced again.

About 80 staff in his Kapiti Coast and Hawke's Bay rigging, engineering, and galvanising companies would have their jobs in jeopardy, he said.

Inland Revenue was pushing for a harsher sentence because his earlier sentence set a dangerous legal precedent, he said.

Inland Revenue did not respond directly to the accusations.

"Inland Revenue staff work with the highest degree of professionalism, and not only follow our own internal procedures, but also the law at all times," it said in a written statement.

In the High Court at Wellington earlier this year, Easton was found guilty of 22 charges of running companies - East Quip, Hooked on Rigging and Napier Equity - that failed to pay nearly $200,000 in PAYE to Inland Revenue.

In sentencing, Justice David Collins fined him a total of $66,000 and ordered him to pay reparation to Inland Revenue of $140,000. Liquidation of Easton's companies was expected to make a further $60,000.

Justice Collins acknowledged people were often jailed for similar offences, but he took a "lenient approach" because of Easton's good character. His companies were in a financial crisis which he struggled to manage, he usually paid debts, withholding the money was meant to be temporary, significant sums had been paid to Inland Revenue, and remaining companies and employees depended on him, the judge said.

Last week the Court of Appeal dismissed all the mitigating factors except for good character, and described the sentence as "manifestly inadequate" for the seriousness of offending.

Now facing resentencing, Easton could be jailed for up to five years and fined up to $50,000 for his offending, which happened between May 2008 and July 2009. He has been remanded at large to reappear for sentencing in the High Court. Easton said he had been "set up" and wanted to "let the public know what IRD is doing".

Since Inland Revenue put three of his companies into liquidation, he had traded out of debt with other companies and had since paid $893,000 in taxes.

His companies had paid $1.2m in PAYE this year and all other taxes were up to date.

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On multiple occasions he had offered to pay the outstanding bill but Inland Revenue refused this because it would rather chase a heavier sentence, he said.

On top of taxes he paid about $800,000 in legal fees fighting the charges. "Every cent I make goes into paying lawyers." He believed the IRD had a vendetta against him, which was another reason a harsher sentence was sought.

Inland Revenue said that, although the three companies were liquidated, it was working with the liquidator to recover the PAYE bill.

"We would always work with taxpayers or their agents to arrange repayment," it said.

- © Fairfax NZ News

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