A Central Hawke's Bay man has pleaded guilty to 28 counts of evading tax which he knowingly didn't pay each month since November 21, 2012.

Michael John Pallesen admitted the charges before Judge Bridget Mackintosh at Hastings District Court this week.

The summary of facts states that Pallesen owes the Commissioner of Inland Revenue $60,403.78, excluding penalties and interest, for the amount of tax deductions which he failed to pay for Central Tyres Waipukurau Ltd.

Pallesen was sole director and shareholder of the company until its liquidation on April 16, last year.


Under the Income Tax Act 2007, an employer is required to pay deductions made from employees' monthly earnings by the 20th of each month.

For 28 monthly periods Pallesen did not account for tax deductions dating back to November 21, 2012.

According to the facts, a tax agent had prepared the company's employer monthly schedules up until April 2013 before Pallesen took over the job himself. During a voluntary evidential interview with Inland Revenue in Napier in June last year, Pallesen admitted he was aware the company's employer monthly schedules needed to be filed by the 20th of each month after wages were paid and tax deductions made.

He also admitted he knew the tax deductions were due on this same date and that he had known this for some time. Pallesen agreed he was responsible for these payments.

"He was aware the tax deductions should have been paid by the company and were not being paid "right from the start".

In the interview he had said the tax was not paid because of "cash flow issues", but other expenses had been paid during this period, otherwise the company could not have traded.

The summary states that bank statements showed there was enough money for the tax to be paid in full for 18 of the 28 monthly periods.

Pallesen's lawyer told Judge Mackintosh he had hoped there would have been a cheque to present to the court this week, and wanted the matter to be adjourned.

The judge said, "It's a large amount of money that wasn't paid." She ordered a pre-sentence report pending Pallesen being sentenced on April 13.

The maximum penalty for this offence is five years' imprisonment or a fine of up to $50,000, or both.