In Grangewood Enterprises Limited/Anthony Marsden v HMRC [2021] TC08264, a director transferred an intangible asset to his company for £4m, to clear his outstanding director's loan account. Finding no evidence of such a valuable asset the First Tier Tribunal (FTT) confirmed HMRC assessment of a penalty and Personal Liability Notice (PLN) on the director, personally. The company had deliberately submitted inaccurate accounts and CT600 with the director's knowledge. 

The FTT found that:

The FTT held that the penalty for deliberate inaccuracy was correct and as this was attributable to Mr Marsden, so was the PLN. However, given that the advisers had corrected the inaccuracy, the FTT held this warranted further reduction in the penalty assessed, for the quality and promptness of the disclosure, resulting in a 43.75% penalty (reduced from 52.5%).

Useful guides on this topic

Penalties: Deliberate behaviour
What penalties apply to deliberate behaviour? What is Deliberate Behaviour?

Directors' loan accounts: Toolkit
HM Revenue & Customs (HMRC) do a toolkit for advisers. This is our enhanced version with planning points. 

Close company loans toolkit (loans to participators)
This guide takes a detailed look at the Corporation Tax treatment when a Close Company makes a loan to a participator (director-shareholder). It also provides links to our guides for individuals on the making of loans to companies.

External link

Grangewood Enterprises Limited/Anthony Marsden v HMRC [2021] TC08264

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