Tribunal slams errant accountant

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The first tier tribunal delivered a nasty sting to a tax case appellant, confirming and even increasing the fines initially imposed by HMRC.

Michael Stainer, a chartered accountant, and his wife owned The Grand Hotel in Folkestone for 40 years. The Stainers were arrested in July last year after failing to account for income tax through PAYE and NICs from 2006 to 2011.

During this period the Grand was run through six companies and the partnership of the Stainers who were also the director and or company secretary of each of the six companies.

In each year 100 employees worked at the Grand, all of 30 of their employment contracts were in the name of 'The Grand' and did not stipulate which of the six companies operating at the Grand or the partnership they were employed by.

HMRC was particularly critical in its assessment of Stainer, arguing that he was an accountant and “should have been familiar with the PAYE process”. The judge agreed, stating: “Failing to account for PAYE and NI and make returns for someone in Mr Stainer’s position was careless and so the extended period for assessment under s 36 TMA 30 1970 should apply”.

The tax geared penalties for the 2006-7 and 2007-8 periods imposed on Stainer had been abated to 40% to take his co-operation with HMRC into account.

Stainer’s representative argued that penalties should be abated further for co-operation. The judge was not impressed by the argument: “Our view is that Mr Stainer has co-operated no more than he has been legally obliged to with HMRC’s enquiry, forcing HMRC to issue information notices to obtain even the basic information on which they have 35 based these assessments.

“For this reason we have concluded that this aspect of the penalty determination should be increased, reducing the level of mitigation for cooperation to 10%.”

Stainer’s attempts at reasonable excuse were also shot down by the tribunal. In correspondence with the Revenue, Stainer said that he lacked the ability to pay. Again, the judge disagreed, “[I]t is generally accepted that lack of ability to pay does not amount to a reasonable excuse unless the reason for a lack of funds would itself amount to such an excuse.

“Mr Stainer did not provide any evidence that the appellants’ lack of funds arose from any 15 exceptional or unexpected circumstances which might form the basis of such a reasonable excuse.”

Stainer also said that his preoccupation with his day job at Eurotunnel and issues with the local council distracted him. This drew a stern reprimand from the judge, “We have to consider whether a reasonably prudent businessman in his position would have behaved as he did throughout this period and failed to make any returns or payments of PAYE or NI.

“We do not accept that the persistent and ongoing failures by the appellants to make any such returns or payments can be excused by Mr Stainer’s preoccupation with other issues.”

About Francois Badenhorst


I'm AccountingWEB's business editor. Feel free to get in touch with comments, tips, scoops or irreverent banter. 


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10th Mar 2016 16:39

I really hope they make an example of him.

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10th Mar 2016 17:02

Looks like it

His attempts at reasonable excuse were pretty pitiful as well. 

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10th Mar 2016 17:22


Oops. Sounds like a charmer, nice one Judge. 


@ Francois, I love the stock pic you found! 

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11th Mar 2016 19:05

Tribunal slams errant accountant
Clearly the defendant has been locked in the nursery for most of his life & has thrown a portion of malice into the view is that the judgement was wholly correct.

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14th Mar 2016 21:35

Errant Accountant

The appellant is NOT the owner of the property, a quick check on companies house verifies that. Also the appellant does not work for Eurotunnel, that it seems is another work of pure fiction with no grounding in reality when the facts are checked. Is there a penalty for being economical with the truth at a tribunal? If not there should be. It is not the first time this appellant has been economical with the truth.

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15th Mar 2016 14:28

Fit to practice?

As a non accountant, can someone explain how this behaviour is compatible with one's status as a chartered accountant?  I should add that this behaviour is not an isolated example but part of a sustained pattern dating back to 1987.  Does the profession not have any regulatory function or obligation to police its members?

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to petertheteacher
09th Oct 2016 15:58

He's also a very appealing chappie!!! He's appealed once and failed, now it appears in August he filed a last minute appeal to the Upper Tribunal. He must have money to burn!

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10th Oct 2016 18:48

Latest update: he's being investigated by his professional body in relation to this affair.

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05th Jan 2017 11:05

Gone bust owing £814,000 to the taxman. Company wound up. Will we taxpayers get anything back?

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12th Feb 2017 15:47

Notwithstanding the failed appeal and the subsequent liquidation of the principle company the inveterate Mr.Stainer was back in court on February 3rd appealing against the Tax Tribunal decisions under reference UT/2016/0132 in Court 24 Royal Courts of Justice. As the Grand Folkestone Ltd. was liquidated in September 2016, who in fact was the applicant, what were the grounds for the application and when is a decision likely?

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