Ex parte A Taxpayer v HMRC [2018] TC6330 considered HMRC's options in serving a third party information notice in respect of a PAYE/NIC enquiry on the accountant of a company that had gone into liquidation. The answer was to treat the company director as the taxpayer.

HMRC can make a application for approval of a Third Party Information Notice under paragraph 3 of Schedule 36 of Finance Act 2008 directly to the tribunal this is in cases where HMRC suspects that providing a third party with advanced notice of a Schedule 36 notice may jeopadise its case, it can ask the tribunal, in private, for permission to serve the notice. 

As these cases are held in private, we do not often know what goes on.

  • A company was failing and it has an overdrawn directors' loan account.
  • The company director who had until 2013/14 always paid himself a low salary/high dividend combination of pay, decided to make a large salary payment in order to clear his overdrawn directors loan account.
  • He asked his accountant to process the payment under PAYE RTI.
  • The company deducted PAYE and NICs and the loan account was cleared by crediting it with the new pay receivable.
  • The company did not pay HMRC the PAYE and NI due, and it went into liquidation.
  • HMRC in considering whether it could make the director personally liable under Regulation 72(5) and Regulation 86, decided to apply to the Tribunal for a third party information notice to be served on the taxpayer's agent.

HMRC initially made their application for a third party notice on the footing that the “taxpayer” whose tax position was being checked was the Company.

Following liquidation of the Company there was no way that HMRC could comply with their obligation under paragraph 4(1) of Schedule 36 to send a copy of the the notice to the taxpayer. HMRC applied to the tribunal to disapply that obligation.

  • The FTT decided that it did not have power to disapply the obligation. 
  • It did though invite HMRC to submit a fresh application that proceeded on the basis that the relevant taxpayer was the director: HMRC were still checking the tax position of the Director: checking includes carrying out an investigation or enquiry of any kind.

HMRC then reapplied to the Tribunal for approval of a taxpayer notice for the director and and a third party notice for his accountant.


HMRC may also take away computers if files go missing however in the circumstances of this case e.g. a companies processing large salaries ahead of insolvent liquidation, HMRC has only quite limited options under PAYE and Social Security Regulations and hence why it needs to make a thorough fact find. See our guide PAYE Regulation 80 and 72 for case law and further details of these type of cases.

Topital guides for Subscribers

Sch 36 Third Party Information Notices

Sch 36 information notices

PAYE Regulation 80 and 72


External link

Ex parte A Taxpayer v HMRC [2018] TC6330