A former tax agent, Stuart Francis Clarke, was sentenced on tax evasion charges when he appeared in the Auckland District Court on February 16.
Clarke plead guilty to two representative charges of evading the assessment or payment of both personal income tax, and GST for several companies which he controlled, between 2011 and 2018.
He had previously been convicted and fined in 2002 for failing to file personal tax returns from 1998 to 2002.
Clarke was bankrupted in 2014 and was not discharged until 2022, and so for much of the offending periods he ran several companies when he was not authorised by the Official Assignee to do so. Clarke used unnecessarily complicated business structures to try and conceal his business activities, using multiple companies with circular shareholding ownership which all led back to him.
He used at least nine bank accounts for his business activities, several of which were in the names of people who were not involved in the businesses.
Clarke never made any attempt to pay any of the assessed taxes. His intention throughout, and the result of his actions, was to evade the assessment and payment of his taxes and entities he controlled.
The total tax shortfall, relating to tax periods spread over an 8-year period, was approximately $300,000.
When sentencing Clarke, Judge Gibson found that a starting point of 3 ½ years’ imprisonment was appropriate. However, the Court recognised that in 2018 Clarke plead guilty to charges under the Insolvency Act, including charges for operating his accounting practice without the Official Assignee’s consent, and unjustifiable spending and extravagant living, for which he was sentenced to 27 months’ imprisonment.
Judge Gibson identified that the two sets of offending were connected and therefore, after attributing significant deductions on a totality basis for the 27-month prison sentence already served, as well as allowing for other mitigating factors, arrived at a final sentence of six months home detention for the evasion charges.