An Auckland accountant has been struck off and ordered to pay
more than $31,000 after he used 60 clients to get tax rebates
on donations for his own benefit.
Stephen Naismith Fleming made an arrangement with 60 of his
clients which involved them accepting money from him to
donate to a charity.
The New Zealand Institute of Chartered Accountants (NZICA)
Disciplinary Tribunal said Fleming was involved with and "had
a substantial economic interest in" in that charity.
The tribunal said a condition of Fleming's arrangement with
the clients was that the resulting donations tax rebates went
back to him, not the clients.
Prior April 1 2009, there were thresholds that limited the
amount in tax rebates a person could claim back on their
donations, based on the person's income.
Fleming's arrangement allowed him to get around those rules.
"The Member used clients to obtain a donations tax rebate
greater than that to which his own taxable income entitled
him to," the tribunal said in its decision.
Fleming was found guilty of "cavalier treatment of his
clients with the intention of furthering his own interests".
The tribunal also said Fleming failed to carry out due
diligence in making sure the donation tax rebate claims made
by his clients were legitimate.
"The member undertook only minimal enquiry as to the validity
of these arrangements for taxation purposes, thereby
potentially exposing his clients to repay the rebates that
they had not received together with penalties and interest."
Clients were given no opportunity to take independent advice
and Fleming failed to disclose his conflict of interest in
writing to them, the tribunal said.
Under a second charge, he was also found guilty of offering
accounting services to the public without holding the proper
qualification (a Certificate of Public Practice).
When the tribunal wrote to him about the charges on several
occasions earlier this year, Fleming did not respond in "a
Fleming, who was suspended as a chartered accountant in June
2011, did not turn up for his final disciplinary hearing last
month and entered no plea.
He has now been struck off the professional register of
The disciplinary tribunal ordered Fleming to pay the NZICA a
total of $31,183 to cover the costs and expenses of three
hearings before the tribunal, the investigation by the
Professional Conduct Committee and the cost of publicity.
He has 14 days to appeal the decision.