Two director shareholders of a company that went into administration with outstanding amounts of PAYE and National Insurance contributions were held to be personally liable for those liabilities.
The appellants were directors and equal shareholders of a trading company. The company eventually experienced cashflow problems, which were exacerbated by the company’s bank reducing its overdraft facilities and the company’s invoice discounting facility being terminated.
Historically, the appellants received small amounts by way of salary from the company. Most of their income was received in dividends. However, for the tax year 2010/11, the appellants increased their salaries.
The company’s end of year PAYE form P35 for the tax year 2010/11 showed a liability of £164,339.60 for income tax and National Insurance contributions (NICs). Four payments amounting to £21,220.43
