They did this by entering a scheme which allowed the company to pay monies into a scheme which could then be distributed to individual scheme members without attracting an obligation to pay NIC or PAYE.
Hunt (the liquidator) asserted that the directors had failed to consider the company’s interests. In causing the company to enter into and allowing its continuation, they had (the liquidator claimed) acted in breach of their duties to the company. He issued a claim under section 212 of the IA1986 on that basis. The liquidator also argued that payments to the scheme amounted to payments to defraud creditors under section 423.
The directors denied any breach of duty on the basis that before entering into the scheme, and at all times during its continuation, they relied on the advice of BDO. The liquidator suggested that reliance on the advice went beyond not being reasonable, to the extent of being reckless.
The claims failed. Purpose, a pre-condition to liability, is distinct from consequence. In the case of this scheme, it was a consequence that money which would otherwise have been used for the payment of PAYE and NICs was put beyond the reach of the creditor who would receive such payments (ie, HMRC); however, that was not the purpose of the scheme.
The case is a salient reminder of the difficulties of successfully bringing a claim under section 212 or 423 of the IA1986, especially in circumstances where the directors have taken professional advice.
Hunt v Balfour Lynn  EWHC 784 (Ch)
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