In HMRC v S West [2018] UKUT 100 (29 March 2018) the UT found that the crediting of an amount net of tax against a director’s loan account did not amount to a deduction so that the The Income Tax (Pay As You Earn) Regulations SI 2003/2682 reg 72 applied and the director was liable for the tax (in circumstances where he had been aware of the wilful default).
Mr West was the sole director and shareholder of Astral Telecom. For a number of years Mr West had drawn money from Astral during the year and this had been recorded in a director’s loan account. The amount outstanding on the loan account was not extinguished at the end of each year so that it increased for several years. When Astral went into liquidation the loan account of £129 150 was extinguished by the credit...
