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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
, see all updates

Penalties for failure to notify: other penalty issues: company and company officer penalties: personal gain

Once you have attributed the deliberate failure to notify to one or more of the company officers you should consider whether any of these officers, by fact or implication, have gained or attempted to gain personally from the failure to notify. It is sufficient to show that each officer has gained or attempted to gain. It will not however always be possible to establish the full extent to which each officer has gained or attempted to gain.

For example

  • the officer may accept that there was an actual or attempted personal gain from a failure to notify that can be attributed to them, or
  • it may be clear from business records or the officer’s lifestyle that they gained or attempted to gain personally from the results of the deliberate failure to notify.

The recorded payment of normal salary, wages or dividends should not normally be regarded as the company officer gaining personally from the deliberate failure to notify.

If at the time you are issuing the penalty assessment to the company you decide that there is no personal gain and that therefore the penalty is not to be apportioned to any of the company officers, you cannot later pursue any of the company officers for payment of the penalty even if the circumstances subsequently change. For example, if there is no personal gain and you do not issue a notice of liability to the officers, you cannot later apportion liability to the officers if the company goes into liquidation.

This also means that you cannot change the proportion of the company’s penalty notified to any of the company officers, if the circumstances subsequently change.

FA08/SCH41/PARA22