Have you received a Personal Liability Notice from HMRC? Here, we explain what these are, when they can be issued and how we can help.

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.

How can we help?

Our team, which includes ex-HMRC Fraud Investigation Service Officers, has a proven track record in challenging PLN. We can:

• Ensure you are treated fairly and proportionately;

• Consider whether HMRC’s has followed the legislation when issuing the PLN;

• Fully review the position to determine whether HMRC has the necessary evidence to prove deliberate behaviour or negligence;

• Make representations to HMRC as to the underlying behaviour and provide our view as to whether we consider the relevant conditions to issue a PLN have been met;

• If the conditions for issuing a PLN have not be met by HMRC, appeal the PLN; and

• Bring matters to a swift conclusion through negotiations with HMRC, Alternative Dispute Resolution or if necessary, making an appeal to the Tax Tribunal with a view of getting HMRC to either withdraw or significantly reduce the amounts demanded.