Home detention for tax evasion

A man who evaded paying more than $500,000 in tax while contracted to work on the Tauranga Harbour Bridge has avoided jail because he needs to be home to care for his sick wife.
James Allen Kent, 63, of Tauranga, employed 45 staff to carry out sub-contracting work on the bridge, and pleaded guilty in May to 24 charges of not deducting PAYE tax and three of not paying GST.
Kent showed little emotion from the dock as Judge Robert Wolff sentenced him to 12 months' home detention in Tauranga District Court yesterday.
Kent's lawyer, Michael Toner, argued his client had been put in a position he was not equipped to handle.
"A man who probably should not have been put in this position. The contract was not one he could manage and he made an entire bumbling mess of the whole thing."
Judge Wolff said Kent had been involved in the steel fixing industry for 20 years and employed staff, which suggested a degree of business competency.
He said the fact he paid employees in cash "simply indicates that you were hoping to fly below the radar and not pay tax. I don't accept this was a case of bumbling incompetence," he said.
Kent's employees were not made to fill out tax declaration forms and weren't paid during their holidays and sick leave.
Between September 2007 and August 2009 he issued weekly invoices to Auckland Steel Fixers that totalled $1,785,024.13, including GST.
The invoices were issued in the name J M Bishop or J M Bishop Ltd. However, J M Bishop Ltd is not a registered company.
During this period Kent was not registered for GST or registered as an employer with Inland Revenue.
Auckland Steel Fixers Ltd made payments into a bank account belonging to Kent's stepson John Murdoch Bishop totalling $1,801,527.13.
Mr Bishop, who was also employed by Kent, then withdrew the money and gave it to Kent who paid the workers their wages in cash.
Kent gave the workers payslips for the first two months of the work but then stopped. The payslips they received did not show any tax deductions.
Kent was not deducting PAYE tax from their wages and evaded $305,529.85 in PAYE tax.
While Kent charged GST on the invoices he issued, he did not file any GST for the tax years ending March 2008, 2009 and 2010.
Inland Revenue estimated Kent had evaded $197,002.34 worth of GST.
The amounts totalled more than $500,000.
He was previously registered for GST from January 1988 until January 1991 and during that time no GST was returned and no returns filed.
When he was interviewed by Inland Revenue staff, Kent admitted the facts as outlined and said he knew he should have deducted PAYE and paid both PAYE and GST tax.
Judge Wolff said the Crown's suggestion of a sentence of two-and-half years to two years and nine months in prison was lower than expected.
He gave a nine-month discount for the guilty plea and said if it were not for the "intensive care" required by Kent's sick wife he would have been sentenced to two years' imprisonment.
"Even when sending a message, the court should not be devoid of charity," he said.
He said the lengthy period on home detention was designed to, "send a message that this offending would usually get you prison."