UT-2024-000019 - [2025] UKUT 00257 (TCC)

From the time of the acquisition of DFL in 2008 until CW sold DFL in February 2019, DFL made monthly payments for the benefit of CW and his wife.

CW requested a substantial increase in salary in March 2011 along with a controlling interest in the companies owned by the shareholders. He justified the increase in salary as being reasonable remuneration for his position of CEO of a substantial group of companies and in line with remuneration received by other CEOs of similar sized groups. The demands made by CW were discussed at a shareholder meeting in May 2011. Following the meeting there were various discussions between the shareholders and eventually the salary increase was unanimously agreed by the shareholders in July 2011, but his other demands were refused. CW also requested at that time that his remuneration be paid through another company (Ash 126). AP explained that her father wanted to check that this was "above board" and spoke to Ashgates who reassured him.

Mr Robinson took AP to the relevant contracts. The first (dated 23 December 2011) is between DFL and Pink under which Pink agrees to provide services (broadly, management assistance, consultancy and administrative/accounting support) for £23,000 (plus VAT) per month. Under another contract of the same date between Ash 126 and Pink, Ash 126 agrees to provide services (defined in the same way as under the DFL/Pink contract) to Pink for £20,000 (plus VAT) per month. In both cases, the monthly fee was increased in line with RPI on each anniversary.

AP says that, to the best of her knowledge, these monthly payments were for the benefit of CW and his wife as remuneration for CW’s services and something from which she gained no benefit.

These agreements were drawn up in November 2011 and signed by CW on behalf of DFL and Ash 126 and AP on behalf of Pink. She recalls that Ashgates advised that she should sign them on behalf of Pink as they felt it would not be correct for CW to sign on behalf of all parties. She was not involved in the conception or drafting of these contracts in anyway and never questioned why these payments were being made by DFL/Pink.