Daniel Witton v The Commissioners for HMRC

Daniel Witton v The Commissioners for HMRC

HMRC failed to prove, on the balance of probabilities, that the Appellant acted deliberately in understating his taxable profits for 2006/07 and 2007/08 or that he had actual knowledge of any wilful failure by DSL to deduct PAYE and NICs for 2008/09–2010/11. The evidence did not establish the statutory pre-conditions for Regulation 72(5) Condition B or for the extended time limits for discovery assessments. The Appellant’s reliance on a competent accountant and his belief that PAYE was operated precluded a finding of deliberate behaviour.

Parties
Appellant: Daniel Witton; Respondents: The Commissioners for His Majesty’s Revenue and Customs
Jurisdiction
England and Wales
Judgment Date
26 February 2026
Procedural Posture
Tax Appeal / First Tier Tribunal Judgment
Outcome
Appeals allowed
Legal Topics
Discovery Assessments, Deliberate Behaviour, Self Assessment, PAYE Regulation 72(5), Wilful Failure to Deduct Tax, Burden of Proof, National Insurance Contributions, Director's Liability
Tax Law Discovery Assessments Deliberate Behaviour Self Assessment PAYE Regulation 72(5) Wilful Failure to Deduct Tax Burden of Proof National Insurance Contributions +1 more

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Parties

Daniel Witton

Appellant

The Commissioners for His Majesty’s Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Judgment

Legal Issues

  1. 1 Whether HMRC established deliberate behaviour by the Appellant for discovery assessments and penalties for 2006/07 and 2007/08
  2. 2 Whether the Appellant had knowledge that DSL wilfully failed to deduct PAYE tax and NICs for 2008/09, 2009/10, and 2010/11
  3. 3 Whether the statutory pre-conditions for Regulation 72(5) Condition B were met

Ratio Decidendi

HMRC failed to prove, on the balance of probabilities, that the Appellant acted deliberately in understating his taxable profits for 2006/07 and 2007/08 or that he had actual knowledge of any wilful failure by DSL to deduct PAYE and NICs for 2008/09–2010/11. The evidence did not establish the statutory pre-conditions for Regulation 72(5) Condition B or for the extended time limits for discovery assessments. The Appellant’s reliance on a competent accountant and his belief that PAYE was operated precluded a finding of deliberate behaviour.

Court Disposition

Appeals allowed

Orders

  • Discovery assessments for all years set aside
  • Penalty determinations reduced to nil