The writing-off of a director’s loan account did not occur when HMRC claimed it had, so an income tax charge did not arise on the director for the relevant tax year, and a related penalty for a careless inaccuracy fell away. 

Summary 

The writing-off of a director’s loan account did not occur when HM Revenue and Customs (HMRC) claimed it had, so an income tax charge did not arise on the director for the relevant tax year, and a related penalty for a careless inaccuracy fell away.  

Background 

The appellant was a director and shareholder of a company (BGH). The appellant had a director’s loan account (DLA) with the company. BGH’s accounting period ended on 31 January. In BGH’s financial statements for the year ended 31 January 2014 (signed on 18 March 2015), the sum of £783,289 showed as owing to BGH by the appellant was recorded as having