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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 personally be 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 inaccuracy was attributable to the action of an officer or officers of the company, see CH84615.

The use of this power is limited to circumstances where

  • 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.

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

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.

Where there is more than one inaccuracy, see CH82180, in a document, 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.

FA07/SCH24/PARA19