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Tradies get jail time for hiding income and evading nearly $1 million in tax

Two tradesmen have been given prison sentences this month for each evading nearly $1 million in tax.

Hamilton plasterer Paul Andrew Mills was sentenced on February 9 to two years and one month, while Auckland builder Hamish Paul Aegerter received a sentence of two years and seven months last Friday.

Mills’ was sentenced on 11 tax evasion charges relating to the 2009 to 2017 tax years, while Aegerter’s prosecution was for three representative charges of filing false GST and income tax returns, and failing to file returns.

Inland Revenue Legal Services Leader Karen Whitiskie said Mills hadn’t filed any income tax or GST returns during the nine-year period, and also failed to pass on his employees’ PAYE when he became an employer. In total, he was liable for $996,107 in GST, income tax and PAYE on undeclared earnings of nearly $3 million.

“Mr Mills charged his clients GST but never passed that on to Inland Revenue. He deducted PAYE from his employees but never passed that on either. And he didn’t file an income tax return for nearly a decade,” Ms Whitiskie says.

Aegerter had existed largely outside the tax system for 17 years. When he finally filed some income tax returns, he grossly under-reported his income – for one six-year period he returned income totalling $230,717, but bank records showed he had received $2.5 million.

A wider investigation into Aegerter’s affairs showed he had evaded a total of $879,340 in tax, including failing to pass on $630,682 in GST he’d charged his clients. Bank deposits into company accounts over this period totalled more than $7 million.

“This was a deliberate and calculated abuse of the tax system by these tradesmen. The consequences of their actions were that they deprived other New Zealanders to the tune of just under $2 million in tax revenue. That’s money could have gone towards funding a range of important social services everyone benefits from.

“It is really disappointing these tradesmen thought this behaviour was acceptable.

“We recognise that sometimes businesses will get into difficulties. In such cases, people should come and talk to us and we can discuss their options.”

Media contact: Pete van Schaardenburg, 04 890 1698 or 021 348696