The appellant company failed to discharge the burden of proving that HMRC’s determinations of PAYE were incorrect, whereas HMRC had satisfied the burden of proof in respect of the penalty assessments raised.  

At the relevant time, the appellant company operated an Indian restaurant, which was registered with HM Revenue and Customs (HMRC) for PAYE purposes. In January 2016, HMRC made an unannounced visit to the restaurant.  

In June 2016, HMRC wrote to the appellant with a summary of the information obtained and details of the calculated total employee hours. The appellant was advised HMRC considered that the number of hours declared for PAYE purposes was understated. Accordingly, the PAYE accounted for was also understated, using the national minimum wage to calculate the payments and PAYE. No substantive response was received. A follow-up letter was sent