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HMRC internal manual

Compliance Handbook

Penalties for inaccuracies: other penalty issues: company and company officer penalties: officer of a company's liability to pay a penalty

You must check the date from which these rules apply for the tax or duty you are dealing with. See CH81011 for full details.

An officer or officers of a company may be personally liable to pay all or part of the penalty where

  • a company is liable to a penalty for a deliberate inaccuracy in a return or other document, and 
  • the deliberate inaccuracy is attributable to the action of an officer or officers of the company, see CH84615.

Before you can consider charging a company officer penalty both of the two conditions above and one of the two circumstances below must also apply

  • the officer gained or attempted to gain personally from the inaccuracy, see CH84635, or 
  • the company is insolvent or likely to become insolvent, see CH84645.

You must not issue company officer penalties under any other circumstances.

Please note that an officer’s liability to pay a penalty also applies to failure to notify penalties, see CH75520, and wrongdoing penalties, see CH98550.

These company officers are known in this guidance as ‘liable officers’.

In the limited circumstances where it applies the power gives us the right to recover all or part of the penalty from the liable officer. It is important to note however that the penalty is always assessed on the company because it is the company’s return or document that contains the inaccuracy. This means that we do not assess the liable officers for the penalty, but we must send each liable officer a personal liability notice, see CH406300. Personal liability notices are however treated procedurally as if they are penalty notices.

Where there is more than one deliberate inaccuracy in a document, see CH82180, each deliberate inaccuracy must be considered separately for the purpose of establishing whether it should be attributed to an officer or officers.

You cannot recover more than 100 per cent of the penalty from the company and its liable officers.

See CH406200 for guidance about how to apportion the penalty between the liable officers.