Stephen Roberts & Alan Martin v Commissioners for Her Majesty's Revenue and Customs
Decision date: 26 April 2011
Neutral citation: [2011] UKFTT 268 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
This appeal challenged Personal Liability Notices served on two directors for Innova Business Solutions Ltd's unpaid PAYE/NIC. The tribunal found on the balance of probabilities that the directors persistently refrained from remitting deducted PAYE/NIC, paid themselves and some creditors, made no arrangements with HMRC and thus their conduct amounted to neglect attributable to them. The PLNs were held valid and the appeals dismissed.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: high
The tribunal applied and endorsed the test that “neglect” for PLN purposes is failure to do what a reasonable and prudent person would have done in the circumstances, including making reasonable provision for statutory PAYE/NIC liabilities or engaging with HMRC to defer payment; persistent non‑remittance of deducted PAYE/NIC while extracting funds and prioritising other creditors can support a finding that liability is attributable to directors’ neglect.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The decision noted that a pattern of successive phoenix companies with recurring non‑payment to HMRC is relevant and may reinforce an inference of improper conduct by directors, and that it is not a defence that HMRC did not actively pursue payment because companies have an independent statutory duty to pay PAYE/NIC.
Warning
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