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David A Marshall Jeweller Ltd v HMRC

In David A Marshall Jeweller Ltd v HMRC (TC01955 – 30 April) a company paid its controlling director more than £300 000 in 2006/07 without accounting for PAYE. HMRC issued a determination under Income Tax (PAYE) Regulations SI 2003/2682 reg 80 and imposed a penalty under TMA 1970 s 98A at the rate of 10% of the evaded tax. The First-tier Tribunal upheld the determination and the penalty. Sir Stephen Oliver held that the fact that the director had declared the income in his personal return did not absolve the company of its liability to account for tax.

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Why it matters: The First-tier Tribunal upheld HMRC’s view that a penalty under TMA 1970 s 98A was correctly charged in the circumstances here where a company had failed to account for PAYE on substantial payments to its controlling director.

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