Illness is a partial excuse

D and his wife were directors of the appellant company which they began in 2003. The wife stopped working after having a baby leaving D as the only manager of the business.

He was diagnosed with life-threatening cancer in May 2006 and was unable to cope with work even after an operation.

A manager was appointed to look after the company. D who was suffering from depression had to have another surgical procedure – to remove a leg – after which he was less able to cope than before and relied on the manager to deal with business matters. D spent some time in Florida trying to recover.

The company fell behind with its PAYE obligations and HMRC imposed penalties. The firm appealed.

The First-tier Tribunal noted that D was aware PAYE had to be dealt with every month because payments were made ...