Accountant accused for client’s NIC oversight
Self-employed Sean Murphy has been accused of not paying any Class 2 National Insurance contributions from 1995 until 2012 because he had not told the then Department of Social Security of his self-employment. The trial will rule as Murphy v HMRC.
Murphy has not informed HMRC of being self-employed claiming that he relied on his accountant for registering him.
The tribunal did not accept payments before 2006 unless he could prove that his failure to register was due to his ignorance or error.
The tribunal’s decision to allow Murphy’s appeal was guided by a previous decision in a similar tribunal (Dr Jeremy Schonfield vs HMRC, TC/2011/02613).
This tribunal found that before Schonfield appointed his accountant he had “exercised due care and diligence”.
Following Murphy’s appeal that his accountant was with him at three banks interviews when he was setting up his practice, it seemed that his accountant was dealing with his tax affairs and arranged registering with the VAT.
HMRC accepted that Murphy’s failure to pay Class 2 NICs from the start of his self-employment was due to his ignorance.
The accountant involved was not named in the decision.
Source: accountingweb
