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Increased monthly pay was not matched by records

11 May 2023
Issue: 4888 / Categories: Tax cases
Zoe Shisha Events Ltd (TC8805)

The taxpayer appealed against assessments that HMRC raised because it believed the taxpayer had received payments under coronavirus job retention scheme (CJRS) to which it was not entitled.

Broadly HMRC said the taxpayer had submitted an inflated claim. The company’s real-time information returns had shown that its owner/manager (Ms M) was being paid £600 a month but the furlough claim was based on a salary of £3 000 a month. The taxpayer said it asked its accountant to increase her pay to £3 000 a month but they advised that it was best to pay her a salary of £600 a month and anymore should be treated as a dividend. The payslips supporting the £3 000 salary were prepared late well after the cut-off date.

The First-tier Tribunal did not accept that the taxpayer had increased Ms M’s pay. The relevant bank statements did not show the higher...

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