National insurance contribution reversal for an alleged negligent director
FIRST TIER TRIBUNAL CASE
ANTHONY PETER BROUGHTON-HEAD Appellant
– and –
THE COMMISSIONERS FOR HMRC Respondents
The Tribunal determined the appeal on 6 February 2017
Negligent director – balancing of evidence – accruing national insurance years for pension purposes – reinstating contribution years.
Mr Broughton-Head appealed against the decision of HMRC in relation to the payment or non-payment of Class 1 National Insurance Contributions (NICs) between 1985 and 1991. The appeal related to the tax years 1986 to 1989 as they were important to the appellant in respect of his pension.
The appeal was against a decision which stated the the taxpayer had paid nil national insurance contributions during the tax years 1985 to 1991 and he was accused of being a negligent director.
The Social Security (Contributions) Regulations 1979 makes provision for the treatment for the purposes of contributory benefit of late paid or
unpaid Class 1 contributions. Where the late payment or failure in making payment is shown not to be attributable to the negligence on the part of the primary contributor, the primary contribution is to be treated as duly paid.
The appeal was against the previous decision that the appellant was a negligent director. He was the director of a company called Broughton- Head Timber Ltd (Timber), which was wound up on 19 January 1994.
The Insolvency Section of HMRC investigated matters and concluded that he was a negligent director and that no contributions had been paid for the tax years 1986/87, 1987/88 and 1988/89. The appellant’s contributions for those tax years were removed from his record. Case details regarding the contributions were not available.
The appellant requested HMRC in September 2014 to reverse the removal of the contributions from his national insurance records, which HMRC refused to do. They stated the Insolvency department would have solid grounds for removing the contributions.
He also stated that he employed an accountant and was perplexed as to why he was deemed to be a negligent director for the 3 out of 6 years when National insurance was not paid
In a similar case, Tracy v HMRC