Sparrey v Revenue & Customs [2014] UKFTT 823 (TC) (20 August 2014)

Sparrey v Revenue & Customs [2014] UKFTT 823 (TC) (20 August 2014)

The employer (Adra Match Ltd), either directly or through its agent Goodwille, did not take reasonable care in administering PAYE for the appellant. There was insufficient enquiry or liaison regarding the appellant's previous income, despite evidence that payslips were provided. HMRC's reliance on the agent's explanation was inadequate, and the employer cannot delegate responsibility without proper oversight. Therefore, the direction transferring liability to the appellant was not justified.

Citation
[2014] UKFTT 823 (TC)
Parties
Appellant: Ted Sparrey; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
20 August 2014
Procedural Posture
Appeal Against Direction Notice (tax Liability) / First Tier Tribunal (tax Chamber) Decision
Outcome
Appeal allowed
Legal Topics
PAYE Under Deduction, Employer Liability, Reasonable Care, Error in Good Faith, Employment Income
Tax Law PAYE Under Deduction Employer Liability Reasonable Care Error in Good Faith Employment Income

Case Brief

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Parties

Ted Sparrey

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Appeal Against Direction Notice (tax Liability) / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether the employer (Adra Match Ltd) took reasonable care to deduct the correct amount of tax under PAYE
  2. 2 Whether the underpayment arose from an error made in good faith
  3. 3 Whether liability for under-deducted tax should be transferred to the employee

Ratio Decidendi

The employer (Adra Match Ltd), either directly or through its agent Goodwille, did not take reasonable care in administering PAYE for the appellant. There was insufficient enquiry or liaison regarding the appellant's previous income, despite evidence that payslips were provided. HMRC's reliance on the agent's explanation was inadequate, and the employer cannot delegate responsibility without proper oversight. Therefore, the direction transferring liability to the appellant was not justified.

Court Disposition

Appeal allowed

Orders

  • Direction transferring liability for under-deducted tax to the appellant is set aside.