Claims by HMRC

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One of the most astute appointments I have ever made.

A company director

Expert help from our tax defence team

Our expert tax disputes team boasts two of the very best Partners in the country

• Stephen Downie – not only is Stephen a qualified lawyer and head of the director defence team, he is also a qualified accountant and also worked at the Insolvency Service.
• Andy Lynch – who heads up our Tax Dispute team and also worked at HMRC for 18 years in the tax investigation team.

Both are leaders in their field and they are supported by a strong and experience director defence team.

Common HMRC claims faced by directors

We help directors of companies in a range of tax related claims, including:

1. Disguised remuneration and Accelerated Payment Notice claims

These types of claim involve investigations in to different types of tax schemes such as EBTs, EFRBs and other types of arrangements. If you have received contact from HMRC or had an Accelerate Payment Notice of Regulation 80 Determination – we can help. Other types of claim involving these types of scheme involve Loan charges – something else we can advise on.

2. Personal Liability Notice – NIC

HMRC may seek to enforce a Personal Liability Notice, or PLN, against a director personally where a company is placed into insolvency with NIC liabilities which were unpaid during the period of trading pre-liquidation, and where such non-payment is considered to be as a result of the fraud or neglect by a Director.

• from experience, HMRC will seek to allege neglect (rather than fraud) as a lower threshold is required to demonstrate neglect;
• the director may only be liable for a part of the unpaid liability, if considered less culpable, or all of the unpaid liability (which can be significant).

3. Recovery of PAYE

As with NIC above, similar provisions apply to enable HMRC to recover PAYE liabilities directly from an employee which should have been deducted by the company. 

• for almost all scenarios, the employee is usually a director (as there is a need for HMRC to demonstrate a knowing receipt);
• interest and charges will also be payable in addition to the PAYE that should have been deducted.

There is a statutory defence (dependant on the grounds under which HMRC make such claims) that there was either no wilful deduction or that the company did not take reasonable care. In the absence of any such defence, the employee and / or director will bear the liability for the debt owed by the company.

4. Security – PAYE/NIC and VAT

HMRC can demand security for PAYE / NIC and VAT where a company has been placed into insolvency with a debt due to HMRC for PAYE/NIC and/or VAT – and the director sets up a new company. This is whether that be the business purchased out of administration / liquidation or a completely new business. HMRC can adopt the stance that an up-front security sum is required to be paid before the new company can continue to trade.

5. Loan Charge claims

Loan Charge claims relate to a type of disguised remuneration – and can lead formal claims by HMRC. Our expert team are highly experienced in defending these types of claims.

6. R&D Tax Credit claims

These types of claims are becoming increasingly common – where companies were advised by third party “professionals” to make R&D claims which might not have been legitimate. HMRC are not seeking to recover this money – and if it cant do so against the company, it will try and recover it from the directors.

7. Code 8 and Code 9 Investigations

These types of investigations by HMRC relate to alleged tax avoidance and in some cases, allegations of fraud. Our experts can help deal with these serious claims – and where necessary settle the tax liability though use of the HMRC Contractual Disclosure Facility.

Over the course of the last 20 years directors of SME companies have been advised to enter into such schemes but are now facing the loan charge recoveries of the taxes due which may create significant liabilities over the coming years.  This may be particularly prevalent in the next few years, where HMRC and the Treasury are seeking to maximise such recoveries to help pay the national debt.

8. Statutory demands and bankruptcy petitions

Sometimes directors can find themselves on the wrong end of an HMRC statutory demand or bankruptcy petition. In either scenario, urgent legal advice is recommended – and our tax and personal insolvency experts are on hand to help.

At Francis Wilks & Jones we provide a quality value added service and can help you whatever HMRC claim you are having to deal with. Speak to a friendly member of our team today. Or simply pick up the phone and speak to Andy Lynch or Stephen Downie.

FWJ did precisely what it set out to do. I am extremely grateful for its assistance.

A client who had received a Request for Security from HMRC for a sum that would have caused their company severe financial difficulties. We helped them to have the entire bill withdrawn

Andy Lynch at FWJ was literally a life saver for me. I ran in to some tax issues with HMRC and I suffer from mental health issues as well so I was a complex case. Andy took his time to professionally and accurately layout my case and assist me with finding a resolution. I researched a lot of tax advisers before making my decision and I am glad I did and relieved that I chose Andy and FWJ.

Chris Kitchen