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Income Tax/PAYE regulation 72(5) cond b

Income Tax/PAYE regulation 72(5) cond b

..HMRC pursuing director shareholders for unpaid tax/nic on a cvl and can it be challenged?

Thanks in advance


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03rd Jan 2013 16:56

Not enough info

A link to PAYE Reg. 72 might be helpful.  The relevant sections appear to be:

"(4) Condition B is that the Inland Revenue are of the opinion that the employee has received relevant payments knowing that the employer wilfully failed to deduct the amount of tax which should have been deducted from those payments.

(5) The Inland Revenue may direct that the employer is not liable to pay the excess to the Inland Revenue.

(7) If condition B is met, tax payable by an employee as a result of a direction carries interest, as if it were unpaid tax due from an employer, in accordance with regulation 82 (interest on tax overdue). "

Is a "cvl" a creditors voluntary liquidation?  If so, I can understand why HMRC might be trying to recover the PAYE due from someone other than the company.

Under Reg. 72, HMRC can only pursue a director for PAYE which should have been deducted from his own pay, not from any other employee's pay.  A director is probably in the position of knowing that the company has failed to deduct PAYE correctly, but not necessarily so if it was not his responsibility.  You will know the circumstances better than any of us.

I have no specific experience of this, but I have always understood that a director can be pursued for PAYE on his own salary because in his capacity as a director, he has failed to ensure that the company has paid over the correct PAYE.

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