HMRC has the power to seek the recovery of National Insurance contributions (NICs) from an officer of the company personally if it believes the failure to pay is the result of fraud or negligence. In this case, an officer of a company is a director; company secretary; shadow director; or any manager of the business as a whole. To recover the unpaid NICs from the company officer, a Personal Liability Notice (PLN) is issued. This will include details of why the Personal Liability Notice has been issued and the amount that should be made.
Which HMRC Department Issues PLNs?
Personal Liability Notices are issued by a specialist Personal Liability Notices Team that forms part of the Specialist Investigations Department in London. As you would expect, such a specialist team will only issue PLNs where it believes they are enforceable. Although there is no obligation to cooperate with the PLN team, business taxpayers that choose to cooperate can make representations may be able to negotiate a settlement. Decisions made by the Personal Liability Notices Team can also be appealed to the Tax Tribunal.
When will PLNs be Issued?
The Personal Liability Notices Team will only issue a PLN where it believes the failure to pay National Insurance contributions was the result of obvious neglect and where the following factors are at play:
- There has been persistent failure to pay PAYE/NICs when other payments have been made on time;
- Company directors’ remuneration has continued to be paid during the period;
- The individual has been involved with other companies where NICs and other taxes have not been paid;
- The assets of an insolvent business which has run up significant tax debts (including PAYE arrears and NICs) are transferred to a new company run by the same individuals.
Have you been contacted by HMRC’s Personal Liability Notice Team? Perhaps you have received a PLN and want to appeal the decision to the Tax Tribunal? Please call 020 8444 3400 for a no-obligation discussion of your circumstances.