COMPLIANCE
Main points l an accountant agreed to act as a director for a client l the company failed and the accountant was deemed liable for the HM Revenue and Customs (HMRC) debts l failure to appeal to the First Tier Tribunal (FTT) on time and to pay the security deposit resulted in criminal charges. T his case, which was decided 1 in May 2023 at the Upper Tribunal (UT), was unusual because the person who had become jointly and severally liable for the tax was an accountant that freely admitted to being an unpaid director of the company, who was working under the direction of a shadow director. Background Mr Horder, a qualified accountant, was introduced to a client, Mr Yousuf, who asked him to establish a company by the name of Quadragina. Mr Yousuf asked Mr Horder to be a director, and Mr Horder duly appointed himself and his own sister, Jane as director / shareholders. Neither was to receive remuneration, and Mr Horder’s sister wasn’t involved with the business. Mr Horder then assumed responsibility for paying employees, undertaking book-keeping and accounts work, paying the rent and reimbursing expenses / payments to HMRC of pay as you earn (PAYE), National Insurance contributions (NICs) and value added tax (VAT). It quickly became apparent that the company was making a loss and owed money to HMRC. In fact, after some initial payments, no PAYE or VAT was remitted to HMRC for over two years. The expense claims were covered by receipts at the outset, but then became ever larger with no covering receipts. On 27 February 2018, HMRC issued Quadragina and the two directors with a Notice of Requirement (NOR) to provide security in respect of the outstanding liabilities totalling almost £80,000. The deadline was 8 April 2018. Suffice to say, the security still hadn’t been paid over, despite HMRC making it clear that criminal charges would result if the security against the debt remained unpaid.
The Horder case
Justine Riccomini MSc FFTA AIPA Chartered MCIPD ChFCIPP, head of taxation, the Institute of Chartered Accountants of Scotland (ICAS), sets out the key issues from the Horder case, in which an accountant agreed to act as a director for a shadow director client
| Professional in Payroll, Pensions and Reward | April 2024 | Issue 99 18
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