The Commissioners for HMRC v Gary Quillan

Facts

BOH Investments Ltd was wholly owned by Mr Gary Quillan, who was also its sole director. On 16 January 2017 BOH passed a resolution for voluntary winding up and Andrew Rosler of Ideal Corporate Solutions Limited was appointed liquidator. The director's loan account was overdrawn in the sum of £439,954. The liquidator demanded payment, obtained a statement of means suggesting Mr Quillan had no assets, and, following protracted correspondence and the threat of legal action, accepted an offer of £57,500 in settlement; between February and July 2018 Mr Quillan paid six instalments totalling £57,498, leaving an outstanding balance of £382,456. The liquidator's notice of final account dated 18 March 2019 recorded that no further funds were expected into the liquidation in that respect. BOH was dissolved on 15 April 2020. HMRC opened an enquiry into Mr Quillan's 2018-19 self-assessment return and issued a closure notice dated 9 August 2023 charging the outstanding balance under section 415(1) of the Income Tax (Trading and Other Income) Act 2005. The First-tier Tribunal allowed Mr Quillan's appeal, holding the loan had not been written off, and did not decide the question of timing. HMRC appealed with the permission of the First-tier Tribunal.