Company, directors, fail to pay taxes

Press, 26 January 1988, Page 18

Company, directors, fail to pay taxes

Fines, costs, and solicitor’s expenses totalling $7665 were imposed in the-District Court yesterday on a company and its two directors for misapplying tax deductions from employees’ wages for six months to January last year. Pleas of guilty were entered on behalf of the company, Regency Aluminium, Ltd, and by its directors, Wayne Francis Bailey, aged 32, and Craig Lawrence Young, aged 24, to six breaches of the Income Tax Act relating to each month from August, 1986, to last January.

These were that they knowingly applied tax deductions from employees’ wages for other purposes. The total amount misapplied was $14,779.98,

which with a 10 per cent penalty increased to $16,257.97.

Judge Mahon imposed a fine of $5OO on. each of the six charges against each director, together with court costs and solicitor’s-fees. The company was ordered to pay costs and solicitor’s fees on each charge. Mr M. N. Zarifeh, who appeared for the Inland Revenue Department, detailed the offences against the defendants and said that when questioned by an officer of the department that they needed the money at the time and if they had not used the tax deductions rather than pay them to the department they would not have been able to keep the business afloat. All of the outstanding

P.A.Y.E. . deductions remained unpaid, Mr Zarifeh said.

Mr P. J. Egden, for the defendants, said that at the time the company faced a series of debts from factors beyond its control. They included the failure of a die part in the aluminium production, causing a month’s lost production, and the affects of a month-long drivers’ strike.

The company had a severe cash flow problem. It was now working on a very strict budget. The Judge said the two directors had made a conscious and deliberate decision to use the P.A.Y.E. money to pay other creditors, ahead of their very clear obligations under the Income Tax Act.