Charging penalties: company officer's liability to pay a penalty: notifying the officer about their liability to pay
You must send each liable officer, see CH84610, the following documents.
- A personal liability notice form NPPS8A which is available in SEES. NPPS does not issue personal liability notices to company officers and you must issue a SEES form NPPS8A in every case. This must include an explanation of how you calculated the company officer’s penalty liability to pay. The NPPS8A must show the full name of the individual officer and should be sent to their private address. If you do not know this, the notice should only be sent to the officer care of the company when the company is still trading.
- A copy of the penalty assessment form NPPS2 and the NPPS100 and NPPS100(S) explanation letter that we sent to the company. You can get a copy of the NPPS2 from the NPPS Caseflow document store. Where you have had to complete a manual NPPS2, you will need to send a manual copy to the company.
You must also take the following action on these specific types of cases:
- For VAT penalty cases only (where there is a live VAT registration on the mainframe), you will need to complete input form VAT 292 to get the penalty into the VAT mainframe. You must ensure that the NPPS8A includes the VAT registration number (VRN) of the company.
In each of the following types of cases you must issue a payslip to each liable officer for paying a penalty, NPPS8B which is available in SEES. The payment reference will depend on the type of case (see below):
- For indirect tax penalty cases where the company does not have a live VRN eg. Excise and Environmental Taxes and redundant VAT traders, you will not be able to issue the NPPS2 Penalty Assessment to the company via NPPS. You will therefore need to follow the guidance at CH407920 to obtain an EXP reference. When the Cumbernauld Accounting Team (CAT) receives the NPPS2, they will set up an accounting record for the company. When the relevant DMB SPOC has been informed about the officer’s liability, following the guidance further down this page, DMB will pursue the officer for the debt. You should send each of the company officers’ form NPPS8A (and a copy of the NPPS2) and a NPPS8B payslip. Both must show the EXP reference.
- For all other cases (direct taxes, Excise and Environmental Taxes where there is a live VRN you should issue a payslip for paying a penalty NPPS8B which is available in SEES. This should show the SAFE charge reference for the penalty assessment issued to the company. Before you can do this you will need to obtain the 14 digit SAFE charge reference number from the Miscellaneous Charges Unit (This content has been withheld because of exemptions in the Freedom of Information Act 2000) . When you contact them they will need the NPPS reference number and the head of duty specific reference, for example the UTI.
Although it will not be possible to issue the NPPS2 and the NPPS8A on the same day, you should issue the NPPS8A once you have obtained the relevant reference number.
In the Maintain Company Officer liability screen within NPPS you must enter the details of each liable officer or officers.
You should also check the box for ‘Joint & Several Liability’ when creating the penalty case within ‘Case Information’ within NPPS as this will help identify these cases.
Informing DMB about the officer’s liability
In all cases you must tell DMB when you issue a notice to a company officer to inform the officer about their liability to pay all or part of a company penalty. This will require DMB to pursue the officer and not the company for the debt.
For each officer you must send DMB a copy of the NPPS8A for the company officer and the NPPS2 for the company, with a covering memo explaining that they must pursue the company officer for the debt. You should include in your memo details of whether the company officer or officers continue to be involved with the company and any information known about the company officers ability to pay and details, or their assets. The Head of Duty (HOD) reference for cases processed through NPPS should also be quoted in the memo.
The person you must send this information to in DMB depends on the HOD. This will be the Single Point of Contact (SPOC) for the relevant HOD, see DMB Contacts page.
You or a colleague may however be dealing with penalties that cover more than one head of duty. Under these circumstances you will need to inform each of the SPOCs you are referring information to of the other penalties you are charging or aware of and all the relevant references.
Note that if the company chooses to pay the entire penalty DMB will not pursue the liable officers for payment. Where the full amount is not paid by either the company or the officer, DMB will then pursue the officer for the penalty. DMB will however revert back to pursuing the company where payment cannot be secured from the officer. Under these circumstances they will notify the company that this is our intention.
Informing the company about the officer’s liability
When you have issued the NPPS8A and the other relevant documents to the company officers, you will need to tell the company that the officers are personally liable to pay all or part of the penalty. You should issue the officer’s liability to pay a company penalty - notification to company NPPS8C which is available in SEES. This explains:
- how much each officer must pay
- that if the company chooses to pay all or part of the company officer’s liability, we will not then pursue the company officers for payment
- that if full payment of each company officer’s liability is not received after we have considered all appropriate recovery options, DMB will revert to collecting any amount that remains outstanding from the company
- that the penalty assessment is recorded on the company’s record and will remain on the record until the full amount has been paid
- that the company should ignore any reminders to pay amounts that have been notified to company officers unless we have told them we have reverted to collecting these amounts from the company. You should apologise for any inconvenience this may cause and explain that these are automated and cannot be stopped.
The NPPS8C must be addressed to the company in the same way as the penalty assessment notice.
If you receive an appeal against the company penalty or the officer’s liability notices you must informally stand over the penalty and inform DMB immediately through the same SPOC. You must also inform them, in due course, of the outcome of the appeal and provide them with details of any amended assessment or NPPS8A notices that you are required to issue.
You must also tell them if either the company penalty or the company officer’s liability to pay is amended for any other reason. This will ensure that, for example, any excess amount paid by the company officers is not refunded to the company.