An appeal against HMRC assessments raised on a company and its participators including in respect of directors’ loan account movements and associated penalties were substantively dismissed. 

The appellant company (‘LLRH’) was jointly owned by husband (MAS) and wife (MDS). HM Revenue and Customs (HMRC) opened enquiries into LLRH’s tax return for the accounting period ended 31 July 2014 and self-assessment returns of MAS and MDS for the tax year 2013/14. HMRC identified errors in the returns, and subsequently issued discovery assessments and closure notices for several accounting periods and tax years. Penalty assessments were also issued. The appellants appealed. 

MAS and MDS had been the legal owners of a property (‘HW’) from 1 December 2008 to 7 May 2019.  They purchased the property as a personal asset. In the period to 31 July 2011 expenditure on HW amounting to £178,738 was incurred by LLRH.