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Restaurant owners given home detention for ripping off taxpayers

A husband and wife have been sentenced to eight months' home detention for not declaring more than $1 million in cash sales at their Auckland restaurant.

Taruun and Shetall Khurana, who ran the Indian Kitchen restaurant in Howick, were sentenced in Manukau District Court on four charges of tax evasion.

Patrick Goggin, Inland Revenue's Group Manager of Investigations and Advice, said the Khuranas' offending was a clear case of deliberately trying to cheat the system, with the couple ripping off taxpayers to the tune of nearly $450,000.

"These people did not declare a large number of their cash sales and underreported the real amount of wages they paid staff. This was all done for their personal benefit," Mr Goggin said.

"The vast majority of businesspeople in New Zealand do the right thing by declaring all their income, but this couple has tried to systematically rip off the system by pocketing cash 'under the table'," he said.

Inland Revenue investigators uncovered more than $1 million in undeclared sales over a six-year period, meaning $121,957 in GST was unpaid. Mr Khurana owed $154,015 in income tax as a result of failing to include income received from the business, while Mrs Khurana owed $132,877. The couple also received $34,707 more in working for families tax credits than they should have.

"This result is a victory for all fair-minded taxpayers and a warning to those who think they can try to cheat the system and get away with it. You will be caught," said Mr Goggin.

"Our systems are designed to pick up irregularities and we continue to use new tools to help us identify and stop those not paying their fair share of tax," he said.

Inland Revenue is now working to recover the money.