PLUMBING FIRM AVOIDED £3902 IN TAX PAYMENTS

Greymouth Evening Star, 26 September 1947, Page 8

PLUMBING FIRM AVOIDED £3902 IN TAX PAYMENTS

(P.A.) . WELLINGTON, This Day. ■ ■ Four charges of wilfully making false income tax returns during the years 1942-45 were preferred against T. R. McLaughlin Ltd-., plumbers, before Mr Thompson S.M. today. Thecompany'pleaded guilty the counsel for the Crown stated that in the four years income had been understated by almost £7OOO on which income fax, but not social security taxes, Had' been assessed at £3902 0s 9d.> Five methods had been employed by the directors. Sales had been suppressed and ih five years £3750 had been traced by income tax, inspectors, which had been paid into but credited to the accounts of the three directors. Most of it had been divided up among the directors in proper-. tions to their holdings. The second method, he .said, was by means of excessive reductions for entertainment and travelling expenses. The department estimated that this was £2341 in excess of what was considered reasonable. The third method was by means of fictitious expenses. The fourth was erection at Otaki by T. R. McLaughlin personally of a house, and payments among the various directors suggested the repayment of their share of the money withdrawn.

The fifth method was by crediting various payments, such as car expenses and sales tax, to wrong accounts.

Counsel said that consistently cheques, which should have been credited to the company, had been credited to the directors personally. For the defendants, counsel said that in the four years the company had an income of £51,0.00 and paid tax amounting to £25,700. The firm had been candid about the matter and had since paid the tax in question. The Magistrate said he could come to no other conclusion but that wilful fraud had been, committed. There was no difference between this method and fraud and a Government clerk stealing funds. He imposed the maximum penalty of £lOO on each of the four charges, plus costs.