Tax investigation: “I smelled a rat’

Patrick Bourke, the founder of Ayres Management, launched his own investigation into Plutus payroll and realised that something was wrong

Tax Investigation I smelled a rat

Introduction

Ross Greenwood: Nettie Mayer my colleague from Nine News was on that story today I was giving a little bit of a hand on one aspect of it. Nettie thank you so much for your time. The aspect of it I was giving him a hand on his head and the structure work and at the very heart of this is a business called Plutus Payroll. They are Plutus Payroll I should tell you it was actually set up by a rather interesting fellow. That fellow is I’ll just try and find all the details is a fellow called Simon Anquetil right. Simon Anquetil oddly enough, won the Australian Institute of Management Young Entrepreneur of the Year award last year.

Now, he has another sip of number of companies at the moment according to some of the records that I’ve seen. He was supposed to be a couple of days ago in Bangkok giving a lecture at a seminar there. Now, he has not apparently been in Australia while all of this has taken place and it said that he left the company Plutus Payroll around about a month ago, in April. Now, as I say he’s a tech entrepreneur type of thing but on his due notice, this evening linked in profile. There is no mention whatsoever of Plutus Payroll but certainly, he was the man who set the whole thing up.

Let’s just go to one of the competitors of Plutus payroll. That man is Patrick Burke owner of AS management. The thing about Plutus payroll was when they launched they offered a free payroll service get that. So, if you’re a small business you got to play this payrolll on low cost and you ask the question as Patrick Burke did. Why does that work? Patrick Many thanks for your time.

Interview

Patrick Burke: You’re welcome Ross.

Ross Greenwood: Okay, when you saw these new rival come up to you and you say, “Well, it’s free. It’s a free service. What did you think?

Patrick: We knew it couldn’t be sustainable, every business has to earn revenue somehow. So we were very intrigued as to where they were going to earn their fee’s from and of course, we were thinking fees not scam immediately.

Ross Greenwood: Okay, tell me about in regards to your own business. You obviously would have signed up a couple of accounts to try and find out what was going on. What did you imagine was going to happen and what were you told was going to happen?

Patrick: We were told that they would cross-sell a number of financial services to people who are customers who put as payroll. So that I would use Plutus as a vehicle to effectively create a marketing database and then sell financial services to those people and commission from the products and services they sold.

Ross Greenwood: What was the problem with that?

Patrick: Well, of course, you can’t earn commissions without disclosing them to the customer but that legislation changed a number of years ago. When we had a couple of people working for customers of Plutus, they never received any advertising or any approaches from someone selling financial services.

Ross Greenwood:: So you smelled a rat?

Patrick: Yes, absolutely. We knew then that there was no other revenue stream that it had to be a scam of some sort.

Ross Greenwood: What did you suspect?

Patrick: At first we thought must be of not permitting GST, because it was a payroll company they might be—When they addressing input credits but I actually thought that I would have been caught up with at the end of the reconciliation process with the ATO.

Ross Greenwood: Okay, just explain that part of it to me, because quite clearly on a monthly basis you have got to actually tell the Australian Tax Office how much you have paid people and how much tax you’ve set aside for them. Then you’ve got to give the ATO a cheque for that amount of money at the end of the month don’t you?

Patrick: Precisely Ross. And that is how they manage to perpetrate this, I believe is you simply tell the tax office that you’ve paid people less than you really have and you tell your tax office you collected less than you actually have.

Ross Greenwood: Okay, but the point is you get caught up with it some stage, don’t you?

Patrick: Absolutely. I think the whole scam depended on going big very, very quickly and then getting out very quickly and fortunately, the authorities moved quicker than they did. Each month you can sustain the lie for a period of time but its noble. Then at the June 30, year end you send all of your employees, they group certificates so that I can complete their taxes. And the tax office matches the total tax on all of those groups certificates to the total packs that you’ve paid them in cash over the year. If they don’t balance up the tax office launch an investigation. The bank gives you a whole year to under pay and if you’re quick to move in the money elsewhere.

Ross Greenwood: Okay, just one final part about this — in regards to the business you obviously start to smell a rat but you’re let also people in your own industry know a little bit about this, didn’t you?

Patrick: Absolutely we did. We encourage people to ask tough questions of Plutus Payroll when they were being approached by their sales team and a number of people we knew were smart enough to avoid doing business with them.

Ross Greenwood: Tell you Patrick Burke good to have people like you around the place at least keep in check and a balance on other organizations such as this the owner of Ayers Management, which is a payroll business that has done the right thing.

As I say was Patrick that really did help by blow the whistle in regards to what was taking place inside this organization. The good news I’ve got to tell you is largely as best as can be seen. It’s not the contractors or the workers who have been affected by this. It would appear to be with the alleged fraud the tax office principally that has been the main loser of that $165 million. Patrick thank you so much for your time.

Other previously published articles emphasising tax in May 2017.

31-05-2017 9News: Paul Hogan and ATO stand off

31-05-2017 Ross Greenwood: Reputations and jobs on the line as tax commissioner trades blows with Paul Hogan

30-05-2017  I m going to extract revenge  – Paul Hogan

30-05-2017 ABA slams bank levy – Anna Bligh

30-05-2017 ATO Commissioner grilled at Senate Estimates

30-05-2017 Paul Hogan s lawyer reacts to ATO Commissioner Chris Jordan

30-05-2017 Treasurer Scott Morrison “Crackdown on Bank Execs”

29-05-2017 Money Minute – May 29 2017 Benefits Shake-Up

29-05-2017 Tax office to work with Plutus clients

23-05-2017 Money Minute – May 23 2017 “Maths Mistake”

22-05-2017 Inspector-General of Taxation: “I m ready to investigate the alleged tax fraud scandal if needed”

22-05-2017 Today Extra: “Many of these families are making money from having more children,”

22-05-2017 Westpac reveals the impact of the bank levy

19-05-2017 Money Minute – May 19 2017 “Tax Scandal”

19-05-2017 Newsletter – May 19th 2017

18-05-2017 David Coleman – Recommendations to come into effect after bank inquiry

18-05-2017 Paul Hogan s lawyer reacts to tax fraud

18-05-2017 Treasurer Scott Morrison – “Let me tell you about Ken Henry…”

18-05-2017 Unprecedented! $165 million dollar tax fraud ring

16-05-2017 NAB Chairman Ken Henry wants an inquiry into the bank levy

13-05-2017 Ross Greenwood Newsletter 12 May 2017

12-05-2017 9News: CBA CEO hits back at bank tax

12-05-2017 Bank Tax War – CBA CEO Hits Back at Bank Tax

12-05-2017 Prime Minister Malcolm Turnbull

10-05-2017 9News: Budget reveals big taxes on banks

10-05-2017 Anna Bligh – Australian Bankers Association – Bank Levy

10-05-2017 Chris Bowen Shadow Treasurer

10-05-2017 Economic growth optimistic – Alan Oster NAB

10-05-2017 Jennifer Westacott – Business Council of Australia

10-05-2017 Mathias Cormann – Budget 2017

08-05-2017 Budget preview – Bob Deutsch

01-05-2017 Changes to Super are coming soon

01-05-2017 Housing affordability Gratton Insititute

Improving Payment Terms for Small Business

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