Matharu Delivery Service v HMRC

In Matharu Delivery Service v HMRC [2019] UKFTT 553 (29 August 2019) the FTT found that the creation of a detailed company directors’ loan account was ‘reasonably required’ by HMRC.

Matharu was wholly owned by Mr Matharu. Following the opening of an enquiry into the company’s tax return HMRC was provided with a copy of the company’s directors’ loan account (DLA) but it was not the fully itemised chronological version that had been requested. The company’s accountant then advised HMRC that no other DLA existed. This led HMRC to issue an information notice requiring a detailed DLA (FA 2008 Sch 36). A separate information notice was issued to Mr Matharu.

Mr Matharu contended that it was unnecessary to provide a more detailed DLA. He argued that it was possible for HMRC to establish the detailed position by reconciling the DLA that had been provided with Mr Matharu’s...