D Demetriou v HMRC

In D Demetriou v HMRC (TC01249 – 13 July) a firm of solicitors discovered that one of its partners (D) had arranged for £90 000 to be withdrawn from the firm without authorisation.

The firm took legal action against D and required him to retire from the firm.

D was also struck off the Roll of Solicitors by the Law Society.

D had been entitled to a share of the firm’s profits for 2004/05 and 2005/06.

Rather than paying this to D the firm set most of this against the amounts it was owed by D (which included legal costs as well as the original unauthorised withdrawal).

D did not include the amounts which the firm had retained on his 2005/06 tax return.

Following an enquiry HMRC issued an amendment charging tax on the amount in question. D...