The husband-and-wife owners of several South Auckland logging companies have been given jail and home detention sentences respectively for failing to pass on more than $225,000 in employee tax deductions.
Jamie and Ellen McCulloch, aged 59 and 46, were sentenced last week in Papakura District Court on multiple tax evasion charges for offending that occurred over an eight-year period. Mr McCulloch was sentenced to 18 months in prison while Mrs McCulloch was given seven months’ home detention.
Richard Philp, Inland Revenue’s Lead for Micro-Business, said the McCullochs showed a total disregard for their tax obligations as employers and their duties as company directors. Once one of their companies became significantly indebted to Inland Revenue for not passing on employees’ PAYE deductions, they simply went into liquidation and then continued operating their business under the auspices of another entity.
“The McCullochs were written to and contacted by Inland Revenue multiple times, yet they repeatedly shirked their responsibilities and did not pass on the tax they deducted from employees,” Mr Philp said. “Despite endless promises to do the right thing, they instead used the money to pay off creditors or for their own personal expenses.”
Mr McCulloch was responsible for the day-to-day operations of the companies while Mrs McCulloch would process the wages, prepare PAYE returns and code transactions for the preparation of GST returns.
When interviewed, Mr McCulloch admitted he was well aware that PAYE should be passed on to Inland Revenue and that he made the decisions as to whether creditors were paid first.
“The McCullochs were effectively stealing taxpayers’ money to keep their failing business afloat. That’s simply unacceptable and honest Kiwis should know that we will hold to account people who try to flout the tax rules in this way.”
At the time of sentencing, $141,257 in tax remained unpaid.