A company (IHL) was incorporated by two of the appellants (SPD and ASH) in 2002, and were employees, directors and shareholders. The third appellant (JM) was employed within the IHL group since 2004, and later became IHL’s finance director.  

IHL went into administration in December 2008, when at least six cheques for PAYE and National Insurance contributions (NICs) had been dishonoured. Immediately after commencement of the administration, the business and assets of IHL were sold to another company (BVL) and its subsidiaries. The appellants eventually became directors of BVL and a subsidiary.  

IHL filed a PAYE return for 2008/09 to the commencement of the administration in December 2008. In June 2010, a further P35 was filed on behalf of IHL. 

The self-assessment returns of ASH and SPD for 2008/09 included the income shown on both