Michael Burne v The Commissioners for HMRC
Decision date: 24 October 2024
Neutral citation: [2024] UKFTT 945 (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 concerned HMRC decisions transferring PAYE liability to Mr Burne under Regulation 72(5), a s.8 NIC notice and a discovery assessment arising after Carbon Managed Services Ltd entered creditors' administration and an unexplained large M9 RTI submission. The tribunal found there was insufficient evidence that Mr Burne "knew" the employer wilfully failed to deduct PAYE (Condition B) and that the officer’s belief supporting the discovery assessment was not one a reasonable officer could form. The tribunal allowed Mr Burne’s appeals and set aside HMRC’s notices and assessment.
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’s core ratio is that, where the identity or authority behind an RTI submission is unknown and a creditors’ administration has removed directors’ control, a tribunal should not infer a director "knew" of a wilful failure to deduct PAYE absent clear evidence; and that an HMRC officer’s belief justifying a discovery assessment must be one which a reasonable officer could form, which will fail if material enquiries (for example as to who submitted an RTI) were not adequately considered.
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 observed that negative statutory reserves in company accounts, without consideration of group support and cash‑flow evidence, can be a misleading indicator of an employer’s ability to meet PAYE liabilities. It also expressed concern that HMRC could not identify who prepared or submitted the M9 payroll RTI.
Warning
- The chunk contains extensive repetition of the same material (duplicated passages), which made extraction of discrete points more laborious. The provided notes contain duplicated material and may be noisy; they appear comprehensive on the judgment’s outcome but could omit some procedural detail.