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Cash challenge

01 November 2011
Issue: 4328 / Categories: Forum & Feedback , Employees , Income Tax
An employer has, to some extent, remunerated its employees using cash withdrawn from the business. It must now pay previously unpaid PAYE liabilities

Our client is a sole trader and is in business as a manufacturer of widgets.

He has been subject to an HMRC investigation and among other things it has been found that he has been paying cash overtime to some of his employees and not accounting for PAYE appropriately.

The overtime has been funded out of cash drawings made by our client from the business.

The under-declarations with regard to PAYE go back to 2002/03 and have now been assessed by way of Regulation 80 determinations for income tax and a statement by letter in respect of the National Insurance contributions.

There are other aspects of the enquiry involving VAT evaded as well.

We made a claim on 1 April 2011 under TMA 1970 Sch 1AB that the self-assessment returns for 2006/07 ...

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