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The company paid a bonus and salary into the director’s loan account. No PAYE deductions were made.
The director included the amount in his 2006/07 tax return showing tax paid as nil. HMRC issued a regulation 80 determination to the taxpayer company charging tax on the sum paid to the director.
The company said it was not liable to account for PAYE tax on the payment on the basis the director had reported the amount on his self assessment tax return. It claimed it was acting within the ‘Demibourne concession’.
Under this informal concession now superseded by SI 2008 No 782 regulations 72E to 72G the Revenue provided tax relief to employers in cases in which the tax a person paid when he or she believed he or she was self-employed could not otherwise be offset against the PAYE liability of the employer.
The First-tier Tribunal...
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