Accountant struck off, hit with $31k for tax rebate deal

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An Auckland accountant has been struck off and ordered to pay more than $31,000 after he used 60 clients to get tax rebates on donations for his own benefit.

Stephen Naismith Fleming made an arrangement with 60 of his clients which involved them accepting money from him to donate to a charity.

The New Zealand Institute of Chartered Accountants (NZICA) Disciplinary Tribunal said Fleming was involved with and "had a substantial economic interest in" that charity.

The tribunal said a condition of Fleming's arrangement with the clients was that the resulting donations tax rebates went back to him, not the clients.

Prior to April 1 2009, there were thresholds limiting the value of tax rebates a person could claim back on donations, based on the person's income.

Fleming's arrangement allowed him to get around those rules.

"The Member used clients to obtain a donations tax rebate greater than that to which his own taxable income entitled him to," the tribunal said in its decision.

Fleming was found guilty of "cavalier treatment of his clients with the intention of furthering his own interests".

The tribunal also said Fleming failed to carry out due diligence in making sure the donation tax rebate claims made by his clients were legitimate.

"The Member undertook only minimal enquiry as to the validity of these arrangements for taxation purposes, thereby potentially exposing his clients to repay the rebates that they had not received together with penalties and interest."

Clients were given no opportunity to take independent advice and Fleming failed to disclose his conflict of interest in writing to them, the tribunal said.

Under a second charge, he was also found guilty of offering accounting services to the public without holding the proper qualification (a Certificate of Public Practice).

When the tribunal wrote to him about the charges on several occasions earlier this year, Fleming did not respond in "a timely manner".

Fleming, who was suspended as a chartered accountant in June 2011, did not turn up for his final disciplinary hearing last month and entered no plea.

He has now been struck off the professional register of chartered accountants.

The disciplinary tribunal ordered Fleming to pay the NZICA a total of $31,183 to cover the costs and expenses of three hearings before the tribunal, the investigation by the Professional Conduct Committee and the cost of publicity.

He has 14 days to appeal the decision.