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Jail time for woman who failed to pay $740,000 PAYE

19 Sep 2019
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A ‘qualified by experience’ Manawatu woman has landed a two-and-a-half-year jail sentence and $11,000 in reparations after she was found to be withholding more than $740,000 PAYE from her employees.

Inland Revenue prosecuted Nicola ‘Nicky’ Dargie for failing to pay PAYE, leading to the liquidation of all of her businesses. It’s not the first time she has been convicted.

Dargie conducted debt management workshops in the Manawatu region, which encouraged tax management with Inland Revenue as part of proper financial controls.

Ironically, she also operated five companies and withheld PAYE entitlements from her own staff.

Inland Revenue also prosecuted Dargie in 2007, for 17 identical charges. She was given community work and reparation as a sentence – and according to Inland Revenue spokesperson Karen Whitiskie, Dargie clearly learned nothing from her mistakes.

“In 2007 Inland Revenue prosecuted her for 17 identical charges for which she was sentenced to Community Work and Reparation; but Dargie wasted little time, re-offending within a new company just 3 months later,” she comments.

“Dargie was solely responsible for the PAYE compliance of five companies one of which even completed PAYE filing and payment for other businesses.”

“All five are now in liquidation with more than $463,000 of the $740,000 in PAYE deductions still outstanding, excluding penalties and interest.”

Whitiskie explains that as each company fell behind, Dargie transferred her employees to the next company and continued her offending.

“Throughout the offending Dargie withdrew cash from the companies she operated as well as receiving wages,” Karen Whitiskie says.

On 117 occasions spanning more than a decade, Dargie failed to account for more than $740,000.

As of April 2019, all New Zealand businesses must comply with payday filing requirements, which means that all employers must file employment information every payday.

Employers who deduct $50,000 or less in PAYE and Employer Superannuation Contribution Tax (ESCT) are able to file on paper. All other employers must file electronically.

“Businesses will be able to integrate their tax obligations into their regular payroll cycles,” explained Inland Revenue’s Richard Owen in September 2018.

Inland Revenue and ACC also announced that as of March 2020, the two companies will no longer accept cheques as a form of payment.

“Cheques are part of a paper-based world and don’t mesh with the increasingly digital world we now operate in. The number of cheques being used is spiralling down and will continue to trend that way. Electronic payments are simpler, easier and safer,” says Inland Revenue deputy commissioner Sharon Thompson.

Electronic banking, credit and debit cards, direct debit, cash, and EFTPOS will still be accepted.