Michael Burton v Commissioners for Her Majesty's Revenue and Customs
Decision date: 18 November 2009
Neutral citation: [2009] UKFTT 320 (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 whether Mr Burton was liable for PAYE tax not deducted on earnings from Iris, hinging on whether he had delivered a P45 (or completed P46) so as to prevent Iris applying BR coding. The Tribunal found on the balance of probabilities that no P45 or completed P46 reached Iris or its payroll agent, that Iris lawfully applied BR coding under the PAYE Regulations, and that no adjustment under reg 101A was warranted. The appeal was dismissed and Mr Burton remains liable for the underpaid tax.
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
Where an employee does not deliver a P45 or a completed P46, regulation 31 permits an employer to apply basic rate (BR) coding and to deduct tax accordingly; an adjustment under regulation 101A (or reg 101(4)(a)) treating additional tax as having been deducted by the employer requires factual proof that the employer was required to apply a different code or otherwise failed to deduct when obliged to do so.
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 judgment indicates, without forming a binding rule, that a statutory breach by an employer or HMRC does not automatically relieve an employee of liability for under-deductions absent specific statutory provision, and that HMRC’s duty to reissue coding depends on information being brought to their attention in the ways contemplated by the PAYE Regulations rather than any obligation to trawl internal records.