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HMRC internal manual

National Insurance Manual

Class 1: Personal Liability Notices: Considering issue of a PLN

It is important that HMRC acts to protect directors of genuinely failed businesses and those who are regarded to have taken all reasonable steps to prevent or minimise the company Income Tax PAYE and NIC liabilities from the scope of this legislation. Therefore before a Personal Liability Notice is authorised a thorough enquiry will always be undertaken by trained specialist officers to establish the specific facts and circumstances behind the company failure to pay. They will establish whether there is sufficient evidence for HMRC to prove ‘on the balance of probabilities’ that the failure to pay was attributable to fraudulent intent or negligent conduct. NIM12207 provides further details of how an enquiry is undertaken.

Despite the broad nature of the legislation at S121C of the Social Security Administration Act 1992, in line with assurances given during debates on the introduction of the legislation, HMRC currently limits the application of the legislation to cases involving fraud or what is considered to be more serious levels of neglect.

Generally HMRC may consider a case to involve more serious neglect where it can be established that against a background of persistent failure to pay the contributions due the company was making significant and/or regular payments:

to other creditors

or

to connected persons or companies

or

in the form of director’s salaries

A case may also be judged to involve more serious neglect where ‘culpable officers’ have been associated with previous liquidated companies or other companies that have demonstrated a failure to comply with the statutory requirements of the Income Tax PAYE and NIC legislations.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)