Jurisdiction(s):
United Kingdom

UK FTT: Deliberate conduct not imputed to company; agents’ carelessness attributed to principal; loan relationship debit disallowed for unallowable purpose; advisers’ carelessness preserved HMRC time limits

Published on: 24 January 2024

Published by a LexisNexis Tax expert

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Article summary

Keighley and another v HMRC [2024] UKFTT 30 (TC)

The lead appellant, Keighley, was a shareholder and part of the senior leadership at Primeur Ltd, a trading company that imported doormats. He put sizeable private spending on a corporate credit card, which the company settled in full, yet neither the company’s books nor his self-assessment properly reflected the income tax and National Insurance contributions (NICs) due. HMRC raised discovery assessments and penalties against Keighley, alleging deliberate conduct, covering every year from 2001 to 2017 inclusive. While HMRC held data on the personal expenditure from the 2013–14 tax year onwards, it instead calculated assessments for earlier years on a presumption of continuity. In parallel, HMRC also issued NICs determinations, penalties and assessments to Primeur during the period. Keighley additionally held shares as a shareholder in Valley Dale Properties Ltd (VDP) at the time. He and other shareholders personally advanced unsecured loans to VDP on unsecured terms. Separately, Primeur likewise lent funds to VDP, this time secured by a mortgage over VDP’s property. When VDP disposed of the property at a loss, the shareholder loans were repaid in full, thereafter leaving insufficient monies to discharge part of Primeur’s loan, which was written...

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