A Personal Liability Notice (PLN) can make you personally responsible for certain company tax liabilities or penalties. If you have received a notice, it is important to understand when HMRC can issue one, whether it has been issued correctly and the options available to challenge it.

What is a Personal Liability Notice?

A Personal Liability Notice (PLN) allows HMRC to hold a company officer personally liable for tax related liabilities otherwise payable by the company.

PLNs may relate to unpaid National Insurance contributions (NICs) or penalties arising from deliberate tax non-compliance, including inaccuracies involving VAT or PAYE. The conditions HMRC must establish depend on the legislation under which the notice is issued.

For example, HMRC may issue a PLN for unpaid NICs where it considers that the company’s failure to pay was attributable to an officer’s fraud or neglect. Separately, where a company receives a penalty for a deliberate inaccuracy attributable to the behaviour of an officer, HMRC may transfer some or all of that penalty to the individual.

PLNs can also be used by HMRC to target ‘phoenixism’, where a business enters liquidation with unpaid debts before its assets or operations are transferred to a new company involving the same people.

Who can receive a Personal Liability Notice?

A common misconception is that a PLN can only be issued to formally appointed directors.

Depending on the relevant legislation, HMRC may also consider the actions of shadow directors, a company secretary, manager or similar officer, including someone purporting to act in that capacity.

An individual’s job title will not necessarily determine their position. HMRC are likely to examine their responsibilities, decision-making authority and involvement in the conduct giving rise to the liability.

Why are PLNs becoming a growing concern?

HMRC are increasingly taking a harsher stance in relation to penalties and are more likely to push for deliberate penalties which could lead to an increase in the number of PLNs being issued.

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.

Seeking specialist advice at the earliest opportunity can help ensure that HMRC properly considers the facts and applies the correct statutory test.

Could HMRC publish details of a PLN?

On 13 July 2026, proposals were introduced that would allow HMRC to publish details of certain PLNs connected with penalties for deliberate non-compliance.

The proposal does not apply to every PLN and is not yet in force. It is expected to apply to qualifying deliberate non-compliance taking place after Finance Bill 2026-27 receives Royal Assent.

If introduced, company officers could face not only personal financial liability but also professional and reputational consequences.

Can a Personal Liability Notice be challenged?

Receiving a PLN does not necessarily mean that HMRC’s conclusions are correct.

The circumstances surrounding unpaid tax liabilities and company penalties are often complex. It is important to establish:

• The legislation under which the notice has been issued

• The conduct HMRC alleges was deliberate, fraudulent or negligent

• Whether HMRC has sufficient evidence to support its position

• Whether the relevant statutory conditions have been met

• Whether the liability within the PLN has been calculated correctly

Where HMRC has incorrectly assessed the behaviour, failed to consider relevant evidence or applied the legislation improperly, there may be grounds to challenge the notice.

PLNs generally carry a right of appeal, but the applicable procedure depends on the type of PLN issued. Early action is critical and the notice should therefore be reviewed immediately, appealing late can make the position considerably more difficult.

Does liquidation protect a director from a PLN?

Many directors assume that if a company enters liquidation, its tax liabilities will remain with the company.

However, liquidation or dissolution does not necessarily prevent HMRC from pursuing a company officer personally through a PLN. It is therefore important to understand your potential exposure before taking action.

Read our article on whether liquidating a company will resolve an HMRC tax problem.

How can we help?

Our Tax Disputes and Investigations team includes former HMRC Fraud Investigation Service officers and has a proven track record of challenging PLNs.

We can:

• Ensure you are treated fairly and proportionately

• Consider whether HMRC 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 been met by HMRC, appeal the PLN

• 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

Complete the form below and a member of our team will be in touch, in the strictest confidence.