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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for Failure to Notify: Other penalty issues: Agent acting: Relationships

The terms ‘agent’ or ‘someone acting on a person’s behalf’ is not limited to, say, a ‘tax accountant’. But even when someone is acting on behalf of another person it is important to focus on the behaviour of the person who should have notified us.


An employee, whether of a company (an ‘ordinary’ employee who is not an officer of that company), partnership or individual, is generally a servant and not an agent.

If a company has its own ‘in-house’ tax department, staffed by its employees, then the relationship between a company and, say its tax manager, an employee, is that described above.


A company is a legal person, see CH71180, but it acts in the material world through the people who are its officers - normally its directors and company secretary (if one has been appointed).

Those people run the company, make its returns and so on through all its legal obligations including obligation to notify. That is, to carry out for the company the duties in relation to tax that individuals would do for themselves.

Corporation tax groups

For corporation tax, a group of companies is not a person and does not make returns. Each company has to be considered individually.

VAT groups of companies

For VAT, in a VATA94/S43 group of companies ‘any business carried on by a member of the group shall be treated as carried on by the representative member’.

In effect, the representative member company is the one which is responsible for any failure and is the person, see CH71180, for the purposes of the penalty legislation. It is not acting on behalf of (and so is not an agent of) the other group companies.

However, if an individual company is required to notify liability to be registered and subsequently moves into a VAT group at a later stage, the responsibility to notify liability to be registered remains with the individual company.