12 October 2017

Tax: Inland Revenue v. Cullen

GST refunds claimed under the registration number of a different taxpayer are not valid, the Court of Appeal ruled in $14,950 claim made on behalf of Auckland-based Tamaki Rugby League.
The tax effect of what appears to be a fundraising scheme for local league players through collection of scrap metal went chaotically wrong with confusion over the club’s status.  The Court of Appeal was told Tamaki Rugby League Club ceased to exist in about 2006.  It operated as an unincorporated sports club.  Around the same time Tamaki Rugby League Inc was incorporated under the Incorporated Societies Act.  Rhys Cullen ran the new club as an amateur sporting academy, providing mentoring and support for aspiring professional players together with fundraising assistance.  
In 2010, Tamaki Rugby League Inc went into liquidation on an unpaid debt of $8000 owed Air Liquide (NZ) Ltd.  It was struck off in November 2012.  Whilst it was struck off, Mr Cullen applied in June 2016 for a $14,950 GST refund using the GST number previously allocated to the now non-existent incorporated sporting academy.  The academy as an incorporated body did not exist when the claimed taxable activity was carried out.  No other entity could file a GST return in the academy’s name, the Court of Appeal ruled.
Inland Revenue said it is for the new taxpayer to register for GST; it cannot adopt another taxpayer’s registration details in order to claim a refund.  The Court was told a 2016 application to have the academy restored to the register of incorporated societies was successful, but the judge refused to make this restoration retrospective.         
Inland Revenue v. Cullen – Court of Appeal (12.10.17)

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