A First Tier Tax (FTT) tribunal looking at a case where a travel operator was said to have failed to make PAYE payments for an employee has ended abruptly after HMRC was forced to admit it had sent a letter to the company stating that no tax was owed
The appeal related to the alleged failure of Walkers’ Baggage Transfer Company to account for tax due under PAYE in relation to one of its employees for the years to 5 April 2011, 5 April 2012 and 5 April 2013.
Walkers specialises in providing transport for the luggage of holidaymakers exploring on foot Hadrian’s Wall and its near vicinity. It employs several drivers for this purpose, and HMRC asserted that the company had not accounted for the PAYE properly due for one of its drivers, Roger Thurstan. [Walkers’ Baggage Transfer Company Ltd and the Commissioners for Her Majesty’s Revenue and Customs, [2016] UKFTT 0415, TC05169].
The tribunal noted that Walkers had complained that they had operated in PAYE correctly and had followed the directions issued to them by HMRC, and were appealing against HMRC’s decision to ask for more tax.
The company brought the driver concerned in front of the FTT as a witness. Thurstan then produced a letter to him from HMRC dated 9 January 2015 which read: ‘I believe that your employer operated Pay As You Earn (PAYE) correctly using the information they had at the time. This means that I will not be asking your employer to pay the £727.80 tax due.’
The judge at the FTT noted the ‘obvious conflict’ between the terms of this letter and the stance of HMRC in claiming that further sums were due in terms of PAYE. As a result, the hearing was adjourned briefly, and when it restarted HMRC indicated it would no longer resist the appeal, which was allowed.
Walkers’ Baggage Transfer Company Ltd and the Commissioners for Her Majesty’s Revenue and Customs is here.
