Paul Ellis & Anor v The Commissioners for HMRC
Decision date: 17 February 2026
Neutral citation: [2026] 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 case concerned appeals by Paul Ellis and NYPL against HMRC assessments, penalties and Personal Liability Notices arising from large, deliberate VAT overclaims by a group of Skelwith companies and related PAYE/NICs adjustments. The Tribunal found on the documentary record that the companies made deliberate false VAT reclaims, that Mr Ellis was a key participant who benefited and who had destroyed or failed to keep records, and that payments to Mr Ellis were earnings not loans. The Tribunal upheld HMRC's Schedule 24 penalties, PLNs, PAYE directions, discovery/closure assessments and NIC determinations; all appeals were 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: medium
An inaccuracy in a company’s VAT returns can be attributed to a director for Schedule 24 penalty and PLN purposes where the director brought about the inaccuracy or could and should have prevented it by virtue of duties to exercise care and keep adequate accounting records; contemporaneous, corroborative documentary evidence is central to distinguishing earnings from loans for PAYE/NICs purposes.
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 Tribunal noted that written witness statements not tested by oral cross‑examination are likely to be afforded limited weight, and that a party’s destruction or non‑production of contemporaneous documents permits an adverse inference where such documents would likely have been material.