The former director of a luxury hotel and spa faced a £200,000 tax bill and £90,000 penalty for a single tax year over a director’s loan account
David Kingsmill Plumpton owed £783,289 to his company, the 55-bedroom Botleigh Grange Hotel in Southampton in 2013. These debts were transferred to him through his director’s loan account (DLA) but were written off by the company in the 2013/14 tax year.
A director’s loan of £639,896 was paid to Plumpton in the year ending 31 January 2013 with this being written off in January 2014. The company reclaimed corporation tax on this sum, amounting to £159,574.
Although Plumpton had completed an income tax self assessment (ITSA) form for this period there was no mention of the loans. This prompted an enquiry by HMRC in 2018, started by officer Gordon Smith, seeking confirmation of the sum being written off by the company.
