Since April 2009, HMRC has the legislative power to transfer company’s tax debts or tax penalties in relation to VAT, NICs or PAYE to one or more company officers by issuing Personal Liability Notices (PLN).
The introduction of PLN was aimed at tackling ‘phoenixism’, which is the term used when a business has become insolvent, and it is then put into liquidation while its assets and operations are moved to a new company with the same personnel.
For a PLN to be issued, there must be evidence to show that ‘on the balance of probabilities’ the failure to pay the correct tax liabilities was attributable to the fraud or neglect by a company officer. A company officer could be a director, a company secretary and/or anyone acting in the role of director.
However, we are seeing more cases where HMRC Officers hold a pre-determined view that the underlying ‘behaviour’ that led to an error was deliberate, without having properly considered the facts. In some cases, taxpayers, who are not represented by Tax Investigation specialists, are unable to adequately present the facts of the case to defend their position. This, combined with an increased push for revenues/yield by HMRC teams can result in an unfair and disproportionate use of PLN by HMRC. It is therefore essential to seek specialist representation, at the earliest opportunity, should you receive a PLN.
Since April 2009, HMRC has the legislative power to transfer company’s tax debts or tax penalties in relation to VAT, NICs or PAYE to one or more company officers by issuing Personal Liability Notices (PLN).
The introduction of PLN was aimed at tackling ‘phoenixism’, which is the term used when a business has become insolvent, and it is then put into liquidation while its assets and operations are moved to a new company with the same personnel.
For a PLN to be issued, there must be evidence to show that ‘on the balance of probabilities’ the failure to pay the correct tax liabilities was attributable to the fraud or neglect by a company officer. A company officer could be a director, a company secretary and/or anyone acting in the role of director.
However, we are seeing more cases where HMRC Officers hold a pre-determined view that the underlying ‘behaviour’ that led to an error was deliberate, without having properly considered the facts. In some cases, taxpayers, who are not represented by Tax Investigation specialists, are unable to adequately present the facts of the case to defend their position. This, combined with an increased push for revenues/yield by HMRC teams can result in an unfair and disproportionate use of PLN by HMRC. It is therefore essential to seek specialist representation, at the earliest opportunity, should you receive a PLN.
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