Employment service fined $10,000 for tax law breaches

An employment service company operating in Canterbury and North Otago has been fined $10,000 by a district court judge for 10 breaches of the Tax Administration Act.

Mid Canterbury Employment Services pleaded guilty in Christchurch District Court last week.

The Inland Revenue Department said the offences were committed between February 21 and July 6 last year and that the company failed to pass on employees' PAYE deductions to the department.

The breaches involved five tax periods and related to $121,344.

The company, operated by directors and shareholders Matthew and Tracey Jones, places permanent and casual employment in Canterbury and North Otago.

The court was told an investigation of the company's payroll records showed it had funds available when the PAYE deductions were required to be paid to the IRD.

The directors admitted the deductions had not been paid because the money was needed to pay wages in order to keep the business running.

They said some creditors were also slow in paying, something the company did not have good control over at the time.

Mid Canterbury Employment was audited by the IRD in 2002 and the directors given a full explanation about their obligations regarding PAYE deductions.

In 2003, the company defaulted in its PAYE and GST payments and an arrangement reached for payment of the arrears.

Defaults in this arrangement led to the IRD's latest investigation and charges.

Mr Jones declined to comment on the case.

- nzpa