Witton v Revenue and Customs (Discovery assessments - deliberate behaviour - self-assessment - Regulation 72(5) Condition B Income Tax (PAYE) Regulations 2003 - wilful failure to deduct tax - knowledge of employee - burden of proof) [2026] UKFTT 267 (TC) (19 February 2026)

Witton v Revenue and Customs (Discovery assessments - deliberate behaviour - self-assessment - Regulation 72(5) Condition B Income Tax (PAYE) Regulations 2003 - wilful failure to deduct tax - knowledge of employee - burden of proof) [2026] UKFTT 267 (TC) (19 February 2026)

HMRC failed to discharge the burden of proof to establish, on the balance of probabilities, that the Appellant acted deliberately in understating his income for 2006/07 and 2007/08 or that he had knowledge of DSL's wilful failure to deduct PAYE tax and NICs for 2008/09, 2009/10, and 2010/11. The Tribunal attached no weight to Officer McGuigan's untested assertions and found the Appellant's evidence credible. Accordingly, the discovery assessments, penalty determinations, and Regulation 72(5) Condition B directions were not validly made and the appeals succeeded.

Citation
[2026] UKFTT 267
Parties
Appellant: Daniel Witton; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
19 February 2026
Procedural Posture
Tax Appeal (first Tier Tribunal, Tax Chamber) / Final Judgment After Full Hearing
Outcome
Appeals allowed
Legal Topics
Discovery Assessments, Deliberate Behaviour, Self Assessment, PAYE Regulation 72(5) Condition B, Wilful Failure to Deduct Tax, Burden of Proof, Director Liability, National Insurance Contributions, Penalties, Procedural Fairness
Tax Law Administrative Law Discovery Assessments Deliberate Behaviour Self Assessment PAYE Regulation 72(5) Condition B Wilful Failure to Deduct Tax Burden of Proof +4 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, Tax Chamber) / Final Judgment After Full Hearing

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

Ratio Decidendi

HMRC failed to discharge the burden of proof to establish, on the balance of probabilities, that the Appellant acted deliberately in understating his income for 2006/07 and 2007/08 or that he had knowledge of DSL's wilful failure to deduct PAYE tax and NICs for 2008/09, 2009/10, and 2010/11. The Tribunal attached no weight to Officer McGuigan's untested assertions and found the Appellant's evidence credible. Accordingly, the discovery assessments, penalty determinations, and Regulation 72(5) Condition B directions were not validly made and the appeals succeeded.

Court Disposition

Appeals allowed

Orders

  • Discovery assessments for 2006/07, 2007/08, 2008/09, 2009/10, and 2010/11 set aside
  • Penalty determinations for 2006/07 and 2007/08 set aside