COMPLIANCE
HMRC also offered Mr Horder the opportunity to have the case independently reviewed, but he didn’t respond to the offer. As such, Section 49H of the Taxes Management Act 1970 2 was invoked, which means any appeal to the tribunal made after the acceptance period has ended is only allowed to proceed with the tribunal’s permission. Note that for unpaid amounts of PAYE, Regulation 97N of the Income Tax (PAYE) Regulations 2003 3 provides for the requirement for security, and Regulation 97P(2)(b) 4 permits HMRC to require more than one person to give security. In such an instance, they’re deemed to be jointly and severally liable. "Nothing is worth getting into trouble for, and the accountant can choose to end the relationship with the client at any time" Paying the security (or not) Another entity called Notamvis Ltd (apparently also controlled by Mr Yousuf) then lent Quadragina enough money to pay the security value and yet, the dates of payment and the amounts settled by Mr Horder were both found to be deficient. HMRC noted that in addition to the deficient payments, the wrong reference had been used when the payments had been made. The payments had simply been allocated to the PAYE account rather than allocated as a security part-payment. HMRC then issued a final reminder to Quadragina and Mr Horder asking for payment to be made within seven days. Failure to comply would result in a criminal investigation.
Appeal were filed with the FTT, but both appeals were received late by ten and 14 months respectively. The appeals were refused, but why? The FTT made use of the Martland principle, which was established in Martland v HMRC 6 . This case established a three-stage process containing the questions:
Stage three: what are all the other relevant circumstances? Allowing leave to appeal would be, in the FTT’s view, most likely to result in Mr Horder not being convicted. If a late appeal had been allowed, the likelihood of criminal conviction would be almost nil, due to the deferments of the payment dates in question, meaning that no debt would exist at that point in time. The point in question was, should the FTT allow the appeal, or not? The FTT denied the application for an appeal to both Quadragina and Mr Horder, based on the way in which Mr Horder (who the judge described as a ‘patsy’ and with which Mr Horder himself agreed), had conducted the affairs of the company which had by then ceased trading and was insolvent. Money had been paid out of the business for anything and everything, apart from to pay HMRC. The UT concurred and found the FTT’s conclusions to be sound, which serves to remind us that no matter how strong the case, the lateness of a submission can be fatal. Conclusion It seems odd that this accountant allowed himself to become embroiled in such a tricky situation – but it can and does happen, and for many different reasons. The main thing for you to remember is that help is always at hand, and there’s never any justification for allowing the client to take full control. Nothing is worth getting into trouble for, and the accountant can choose to end the relationship with the client at any time. n
Stage one: is the delay serious? The FTT concluded that Mr Horder’s delay of approximately 14 months was ‘serious and significant’.
Stage two: what were the reasons for the delay? Mr Horder had submitted a medical report as grounds for submitting a late appeal. However, the FTT disagreed this was the cause, as although he did have a significant health problem, the medical report didn’t attribute the illness as a direct influence on Mr Horder’s ability to make decisions in relation to his affairs. Other evidence suggested that he could do so, including that he was running his own accountancy practice throughout. Mr Horder also claimed he wasn’t practiced in relation to appeals and was unrepresented. However, this didn’t wash with the FTT, who concluded that Mr Horder had contacted HMRC and argued successfully that the NOR should be withdrawn against his sister.
Criminal charges In November 2018, the Crown
Links corner 1 https://ow.ly/8Ni250QFBU0 2 https://ow.ly/wvbv50QFC2G 3 https://ow.ly/N9L150QFC7v 4 https://ow.ly/5Q6M50QFCb5 5 https://ow.ly/Q2WZ50QFClU 6 https://ow.ly/rH2F50QFCoQ
Prosecution Service issued notices to Quadragina and Mr Horder, both containing separately drawn charges under Section 684 (4A) of the Income Tax (Earnings and Pensions) Act 2003 5 for PAYE and NICs offences. Notices of
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| Professional in Payroll, Pensions and Reward |
Issue 99 | April 2024
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