I understand that this is general legal advice when a legal and court hearing over disputed tax is pending. Just because HMRC demand tax it does not make them right in the eyes of the law and when you say, sorry HMRC, we think you are wrong and we are going to take this further HMRC have no choice but to defend their position in court. I suspect the reason monies are held back is that they are now subject to a legal challenge. In no other area of law would this happen, so why are HMRC any different?

Lets say company A claimed company B owed them a sum of money and company B denied this. Do you think company B would simply pay up and then say to company A, by the way I am taking you to court because I don't think I owe you this money but you have it for now and then if I win you can pay me it back! What about the interest company A would owe company B if they won in court?

I think 'withholding tax' is different to what the Super League clubs may have been advised to do because they are 'disputing' not 'withholding' and will pay-up when the legal dispute is concluded.

Well seeing as you asked...

If you appeal a determination of tax due raised by HMRC you can apply for the amount under dispute to be held over until the appeal is agreed. So if, for example, HMRC demanded £500k in back PAYE and NICs payments to cover image rights payments to players, you can appeal their judgement and have the debt stood over until a final decision is reached.

What you can't do is arbitrarily withold all future payments of VAT, PAYE and NICs that fall due on the off chance that some of it might end up not actually being due. Well, strictly speaking you can but don't be surprised to find a private debt collection agency knocking on your door wanting to raise a list of goods they can take in settlement.

That appears to makes sense.

Some mistake there surely.

If PAYE is designed to take the tax as you earn the salary, how is it so frequently wrong resulting in a revised tax code the following year, when all details were provided to HMRC on time and in full?

Really... that's the best you could do?

Well done.