RTI returns are required for office holder

In the years before 2018-19 the taxpayer paid its single shareholder and director (M) income which he included in his self-assessment return as earnings from employment. However the taxpayer failed to file real-time information (RTI) returns or pay National Insurance on those earnings.

In December 2018 HMRC carried out a compliance visit and issued National Insurance assessments for the four years 2014-15 to 2017-18 and penalties (FA 2009 Sch 55 para 6C) for failure to file RTI returns.

The taxpayer appealed the penalties but not the assessments. It submitted that M did not have an employment with the company but was only a director and had received his money in that capacity. As a result there was no requirement to file RTI returns.

HMRC said the PAYE Regulations 2003 required that RTI returns must be made for all employees and the term...