West v Revenue and Customs (INCOME TAX/CORPORATION TAX : Employment income) [2016] UKFTT 536 (TC) (03 August 2016)

West v Revenue and Customs (INCOME TAX/CORPORATION TAX : Employment income) [2016] UKFTT 536 (TC) (03 August 2016)

Tax was deducted from director's remuneration via accounting entries and acknowledged in company accounts and forms; Astral's failure to pay was not wilful as it lacked funds; preconditions for transfer of liability under reg 72 and reg 86 were not met; liability for unpaid tax and NICs cannot be transferred to Mr West.

Citation
[2016] UKFTT 536
Parties
Appellant: Stephen West; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
03 August 2016
Procedural Posture
Income Tax/national Insurance Contributions Appeal / First Tier Tribunal (tax Chamber) Final Judgment
Outcome
Appeal allowed
Legal Topics
PAYE Liability Transfer, National Insurance Contributions, Director's Remuneration, Liquidation, Wilful Failure to Deduct/pay Tax
Tax Law Employment Law Insolvency Law PAYE Liability Transfer National Insurance Contributions Director's Remuneration Liquidation Wilful Failure to Deduct/pay Tax

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Parties

Stephen West

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax/national Insurance Contributions Appeal / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

  1. 1 Whether PAYE tax was deducted from director's remuneration
  2. 2 Whether employer wilfully failed to deduct/pay tax and NICs
  3. 3 Whether liability for unpaid tax and NICs can be transferred to employee under reg 72 and reg 86

Ratio Decidendi

Tax was deducted from director's remuneration via accounting entries and acknowledged in company accounts and forms; Astral's failure to pay was not wilful as it lacked funds; preconditions for transfer of liability under reg 72 and reg 86 were not met; liability for unpaid tax and NICs cannot be transferred to Mr West.

Court Disposition

Appeal allowed

Orders

  • HMRC's direction under reg 72(5) Condition B, assessment for 2010-11, closure notice for 2011-12, and decision under s 8(1)(c) SSCTFA 1999 are set aside; liability for unpaid tax and NICs not transferred to Mr West.