A Townsville businessman’s appeal to get tax penalties was overturned after the Commissioner of Taxation found him to be “utterly reckless” in his tax affairs.

Townsville businessman “Mr Dalby” has failed to overturn an amended tax assessment and associated penalties after he failed to lodge income tax returns from 2013 to 2016 and kept poor financial records across his multiple businesses.

“Mr Dalby seeks to present himself as a ‘loveable rogue’, perhaps a latter day Arthur Daley; however in my view Mr Dalby is utterly reckless in his taxation affairs,” the Commissioner found.

Dalby operated a range of businesses, including the construction of rental student accommodation, delivery of workplace machinery training and trading in scrap gold.

He failed to declare income tax for the 2013 to 2016 income years, returning losses instead as his declared expenses were higher than his income each year.

Following an audit, the Commissioner of Taxation assessed him for additional income tax debt and penalties totalling $3,085,830.90, plus interest.

The case centred around Dalby’s withdrawal of funds from his business “Mango Reef,” and whether it should be assessable as Dalby’s ordinary income.

He respectively withdrew $3,277,000, $947,661.60 and $177,000 from the business in the 2014, 2015 and 2016 income years, and claimed that he had used it to fund operations in his scrap gold business, 888 Refining Australasia.

However, the Commissioner found that Dalby did not have the records to substantiate his assertions, making it difficult to prove that he hadn’t used the funds for personal means.

Dalby admitted to the court that he had a loose grasp on his own tax affairs, as a self-described “outdoors, hands-on” person.

“I consider myself just a hard-working Aussie that’s happy to give it a go. And give me a shovel, I’ll dig a hole. Give me a 10 and expect me to be an academic and it’s just not going to work,” Dalby told the court.

“I believe I’m the biggest nightmare for my accountant … because my records are very, very – not so much questionable but very, very poor. It’s always a challenge. My accountant said to me [that] unless I have documentation, we can’t move forward. Yes, my bookkeeping skills are very, very basic, very minimal. I don’t do invoices.”

Following this admission, the Commissioner found Dalby to have been reckless in his taxation affairs due to his failure to keep adequate records across his businesses, and rejected his appeal to overturn the penalties.

“Ultimately, I have concluded that Mr Dalby has exhibited an entirely cavalier attitude to his taxation affairs,” the Commissioner said.

“The failure to keep proper business records, issue tax invoices for work he has done, keep receipts for the expenses he has incurred in earning his income, or provide any analysis of his income and expenses in any of the income years … suggest he does not regard that the taxation laws apply to him, and that he need not take his taxation obligations seriously.”