Burne v Commissioners for His Majesty's Revenue and Customs (INCOME TAX and NATIONAL INSURANCE CONTRIBUTIONS (NIC) - company failed to pay tax and NIC - Regulation 72, Income Tax (Pay As You Earn) Regulations 2003 - Regulation 86, Social Security (Contributions) Regulations) [2024] UKFTT 945 (TC) (24 October 2024)

Burne v Commissioners for His Majesty's Revenue and Customs (INCOME TAX and NATIONAL INSURANCE CONTRIBUTIONS (NIC) - company failed to pay tax and NIC - Regulation 72, Income Tax (Pay As You Earn) Regulations 2003 - Regulation 86, Social Security (Contributions) Regulations) [2024] UKFTT 945 (TC) (24 October 2024)

The tribunal found that the director did not receive relevant payments knowing that the company had wilfully failed to deduct and pay PAYE or NIC. The evidence did not establish wilfulness or knowledge on the part of the director, especially given the creditor-driven administration and loss of control after administration. The statutory conditions for transferring liability under Regulation 72(5) and Regulation 86 were not met. The appeal was allowed.

Citation
[2024] UKFTT 945 (TC)
Parties
Appellant: Michael Burne; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
24 October 2024
Procedural Posture
Tax Appeal / First Tier Tribunal Decision
Outcome
Appeal allowed
Legal Topics
PAYE Liability Transfer, National Insurance Contributions, Director's Liability, Discovery Assessment, Wilful Failure to Deduct Tax, Insolvency Administration
Tax Law Employment Law Insolvency Law PAYE Liability Transfer National Insurance Contributions Director's Liability Discovery Assessment Wilful Failure to Deduct Tax +1 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Downloadable case file Legal principles 4 Authorities cited 8 Party arguments 2 Amounts and remedies 2
Sign in to unlock

Parties

Michael Burne

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Tax Appeal / First Tier Tribunal Decision

Legal Issues

  1. 1 Whether the director received relevant payments knowing the company had wilfully failed to deduct and pay PAYE and NIC
  2. 2 Whether Regulation 72(5) of the Income Tax (Pay As You Earn) Regulations 2003 applies to transfer liability to the director
  3. 3 Whether the Section 8 notice for unpaid NIC and Section 29 TMA 1970 discovery assessment are valid

Ratio Decidendi

The tribunal found that the director did not receive relevant payments knowing that the company had wilfully failed to deduct and pay PAYE or NIC. The evidence did not establish wilfulness or knowledge on the part of the director, especially given the creditor-driven administration and loss of control after administration. The statutory conditions for transferring liability under Regulation 72(5) and Regulation 86 were not met. The appeal was allowed.

Court Disposition

Appeal allowed

Orders

  • Direction under Regulation 72(5) set aside; liability for PAYE not transferred to the director.
  • Section 8 notice for unpaid NIC set aside.