The former directors of a failed Tokoroa company deducted more than $229,000 of PAYE from their staff which they failed to pay the IRD, a court has heard.

Dennis Bruce Allen, 50, was sentenced in Rotorua District Court yesterday to nine months' home detention and 200 hours' community work.

He had previously pleaded guilty to one representative count of tax evasion for knowingly applying or permitting PAYE deductions to be applied for a purpose other than payment to the Commissioner of Inland Revenue.

Wilfred Cortesi, Allen's fellow director at Pro-Installations (Central) Ltd, had previously been sentenced to eight months' home detention and 200 hours' community work.


Judge Phillip Cooper said the offending, which took place between May 2008 and July 2010, was a breach of trust as money deducted from employees' wages for their PAYE obligations was instead kept and used for the company's own purposes.

"This was not a case of bumbling incompetence but a conscious decision not to pay this money in the way it was required to be paid."

He said the money had been used to pay other creditors of the company, which went into liquidation in January 2011.

Allen's lawyer David Weaver asked the court to impose community detention so Allen could continue working, support his family and attempt to pay reparation.

Judge Cooper said community detention would not be sufficient given the nature and duration of the offending.

However, he said arrangements could be made with the Parole Board to allow Allen to be released from home detention to go to work.