FINES TOTAL £400

Gisborne Herald, Volume LXXIV, Issue 22445, 27 September 1947, Page 8

FINES TOTAL £4OO

EVASION_OF TAX “WILFUL_FRAUD” WELLINGTON COMPANY (P A ) WELLINGTON, Sept. 27Four charges of wilfully making false income tax returns during the years 1942-45 were preferred against T. R McLaughlin, Limited, plumbers, in the Magistrate’s Court. The company pleaded guilty. Counsel for the Crown stated that in the four years income had been understated by almost £7OOO, on which income tax, 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 in five years £3750 had been traced by the income tax inspectors which had been paid into the bank but credited to the accounts of the three directors. Most had been divided up among the directors in proportion to their holdings.

Entertainment and Travelling Expenses The second method was by means of excessive deductions 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 the 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personally of a house, and payments among the various directors suggested the repayment of their share of the money withdrawn.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 the wrong accounts. Counsel said 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 £51.600, 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 _of fraud and a Government clerk stealing funds. He imposed the maximum penalty of £IOO on each of the four charges, plus costs.

FALSE INCOME TAX RETURNS.— Five false returns of income, resulting in his paying £5842 less tax than he should have done, led to the appearance of George Thomas Pearce, proprietor of a mercery shop, in the Auckland Police Court yesterday. Pleading guilty, he was fined a total of £450.