Taxi company director claimed $800,000 expenses but didn't have any vehicles

Wednesday, 29 March 2017

A taxi company director who didn't own any vehicles but claimed expenses of $800,000 over two years has pleaded guilty to forty charges of providing false GST returns.

David Robinson, of Star Taxis in Napier, returned sales over $400,000 from unverified sources between 2012 and 2014, and claimed expenses of $800,293 over the same period.

The Inland Revenue Department began investigating the company, and others linked to Robinson, in 2013 after they were identified as being in a refund position.

Concerns were also raised when HBS Bank reported suspicious activity relating to one of the company's bank account. Large cash deposits were followed by withdrawals soon after, or cash withdrawals from an ATM were followed immediately by deposits in a nearby branch.

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It turned out Robinson only had receipts for $3,913 in expenses, of which only $2,460 was deductible.

A search of his vehicle ownership records showed he didn't own any vehicles over the two years, apart from a flatbed truck for three and a half months.

Robinson had claimed GST refunds of $50,900, of which IRD paid $46,881. None of it has been recovered.

When investigators spoke to one of the taxi drivers she said she and another couple of drivers operated the company. They worked from home, kept their own fares, used their own bank accounts and were responsible for their own tax obligations, she said.

She said Robinson's only involvement had been setting up the company and she was unaware it had a bank account.

Robinson had sole control of the accounts and most expenses appeared to be personal. 

The taxi companies Star Taxis and Starhire employed five to 10 people. Napier Transport provided delivery services and Tui Transport was a vehicle hire business.

Robinson, 56, appeared in Napier District Court on Wednesday and pleaded guilty to forty charges of providing false GST returns to the Commissioner of Inland Revenue in order to obtain a refund or payment of tax in the knowledge he was not lawfully entitled to it.

He will be sentenced in May at North Shore District Court.