Have You Received A Personal Liability Notice?
If you are a director, manager or secretary of a business which fails to pay National Insurance Contributions (“NIC”) and HM Revenue & Customs (“HMRC”) consider that non-payment was due to your fraud or neglect then they can issue you with a Personal Liability Notice (“PLN”).
The effect of the PLN is dramatic: liability for the company’s unpaid NIC (plus interest and penalties) transfers from the company to you personally.
The laws governing PLNs have existed for many years, but it is only recently that HMRC have started issuing PLNs. Whilst HMRC tends not to pursue those individuals who have taken all reasonable steps to prevent or minimise company NIC liabilities, the number of PLNs issued is likely to increase for the foreseeable future as HMRC look for ways to maximise the tax intake.
Before a PLN is issued, HMRC will first make enquiries of those involved in the management of a company. Whilst you are not legally obliged to cooperate with those enquiries, we consider that it is important that you give serious consideration to doing so. Not only could it lead to the PLN being withdrawn entirely, failure to respond could result in you being blamed by others involved in the company’s affairs and resulting sole liability for unpaid NIC – something no one wants to face.
A further risk is that a significant level of debt to HMRC may be an issue relevant to being disqualified from being a director in the future.
At Francis Wilks & Jones we have a specialist team which can help and advise you through the PLN procedure, from the initial HMRC enquiry letter to settlement, and also through director disqualification proceedings should they be threatened.