Consultants face tax charges

Carol Karl, Thomas Brown and Timothy Meredith at the start of their trial. Photo / John Stone

Four Northlanders earned six-figure sums carrying out IT consultancy work for various companies, including Government ministries, but failed to file GST and income-tax returns of nearly $700,000, a jury has heard.

The trial of Timothy Meredith, 45, Carol Karl, 50, Andrew Karl, 42, and Thomas Brown, 58, began before a jury of nine women and three men in Whangarei District Court yesterday.

A fifth person, Timothy Craig, 35, failed to appear and would not be tried with the other defendants.

The four are jointly charged with three counts of knowingly failing to provide information on income tax under the Tax Administration Act and Crimes' Act. The alleged offences were committed between January 2011 and July 2013.

The group are challenging the District Court's jurisdiction to hear their case, claiming they have been acquitted of wrongdoing by the Ngai Tupoto Native Council in Hokianga, and that its mana supersedes that of a court of law.

In his opening address to the jury, Crown prosecutor Kevin Patterson described the four as "tax cheats" who committed tax fraud on the Inland Revenue Department by failing to file income tax and GST returns as required of them by law.

He said Meredith failed to pay $336,580 in income tax from an earning of $1,073,188 and $146,581 in GST. Andrew Carl allegedly owes $14,579 in income tax and $12,937 in GST while Carol Karl allegedly did not pay $29,163 and $21,000 in income tax and GST respectively. Mr Patterson said Brown failed to pay $283,000 in income tax and $76,550 in GST.

All four worked as independent contractors, but traded under the name Nga Uri o Tupoto and payments for their work were made to a National Bank account, he said. Meredith was well-schooled in IT and worked under contracts for companies including Tower Insurance.

Mr Patterson said Meredith's CV, which would be shown to the jury during the trial, said he was an honest and responsible person. In this case, he said Meredith was being dishonest by not paying his dues to the IRD.

He said Carol Karl was also well-qualified in IT and worked as a part-time trainer at the Ministry of Justice while Andrew Karl, another accomplished professional in IT, did some work for the Ministry of Education.

"The whole thing was a sham designed to deliberately avoid being assessed and to avoid paying tax," Mr Patterson told the jury.

All except Brown elected to make a brief statement to the jury and said there had never been any intent to evade paying tax. The trial continues.