Chartered accountant admits failing to pay tax

An Auckland chartered accountant has pleaded guilty to breaching a code of ethics when he failed to pay the Inland Revenue $75,000 in PAYE and GST.

The man, who has interim name suppression, admitted the charge at the NZ Institute of Chartered Accountants disciplinary hearing in Wellington today.

He had taken over an accountancy business in 2008, but the workload soon became too much for him.

Office systems were inadequate, he made poor staff decisions and he fell behind in the managing the practice, Institute documents said.

The accountant prioritised payments between staff, IRD and creditors, but fell short by $75,000 to the IRD.

In an effort to turn his worsening financial position around, the man turned to credit cards and drawing on facilities secured over his house and rental property.

He has since managed to refinance his properties and was securing a loan to help repay those he owed money to.

In his submission on the penalty he could face, the man said he regretted the situation, but at no time did he try to cover up his errors and he always filed accurate returns to the IRD.

The institute's board will make a decision on the penalty the man will face next March after he has had an opportunity to turn the business around and pay back debts.