Christchurch restaurateur Jonathon Charles Schwass has been given six months’ home detention for not passing on more than $250,000 of his employees’ tax deductions.
Schwass was sentenced on 21 charges relating to BTS Restaurants Ltd in Christchurch District Court today. He had failed to pay Inland Revenue $265,689 in PAYE, child support, student loan, and KiwiSaver deductions over a 21-month period.
Inland Revenue spokesperson Tony Morris said Schwass had used the money he deducted from his employees’ wages to pay creditors in order to keep trading.
“Mr Schwass was effectively using money that should have gone towards paying for important social services as a free loan to keep his business afloat,” Mr Morris says.
“That’s completely unacceptable – the money employers deduct from staff wages is held in trust on behalf of the Crown. It’s not theirs to use, because it belongs to taxpayers.”
Schwass had been in business for many years and fully understood his tax obligations. An analysis of the business bank accounts showed there were sufficient funds to make the payments in eight out of 21 monthly periods.
“We got in touch with Mr Schwass only a couple of months after the first payment was missed, warning him of the consequences of non-payment, yet he continually failed to meet his obligations.”
Schwass was also ordered to pay $130,000 in reparation. From this, $13,870 would be directed to his former employees’ KiwiSaver accounts to cover the KiwiSaver employer contributions he had not paid.