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18 December 2014
R Jones, J Jones (TC4171)
A married couple were directors of a recruitment consultancy, which went into insolvent liquidation in February 2009.
HMRC concluded there had been a wilful failure by the business to deduct PAYE and National Insurance on payments of salary, and that the directors were aware of the matter.
The directors appealed, saying the payments had been interim dividends.
The First-tier Tribunal decided the sums had “clearly been made as dividends” and there was no reason to think they were unlawful. At the time of payment, they were therefore taxable as dividends.
The taxpayers’ appeal was allowed.
