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HMRC Personal Liability Notice Advice

Licensed UK Insolvency Practitioners FREE Meeting for Company Directors

We can help with serious company debts, HMRC and creditor pressure, VAT/PAYE/Tax arrears, cashflow problems and raising finance.

HMRC Personal Liability Notice: Understanding the Process and Challenging Personal Liability Notices

Most often when a company director receives an HMRC Personal Liability Notice, government has good reason to believe that the officer of the company committed some serious and intentional failure to pay National Contributions (NIC) owed by that company. HMRC believes that this was an intentional attempt to commit fraud or some other serious offense and they will pursue that company’s officer/director to the fullest extent of the law. If you have received a Personal Liability Notice (PLN) and believe you acted honestly and ethically, then there are steps which can be taken when challenging HMRC Personal Liability Notices.

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We explain what options are available to you as the business owner, and it is you as the director who stays in control and decides what route to take. It makes no sense for our client directors to feel pressured into something that they believe does not favour them.
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Phoenix Companies: What HMRC Is Looking For

Although it is perfectly legal to sell the assets of an existing insolvent company to a new owner (or owners), there are certain things which must be kept in mind. If the company needs restructuring and an updated business model in order to turn around, there is nothing wrong with selling those business assets to a person or persons currently associated with the company. However this process needs to be handled by an experienced insolvency practitoner, solicitors and valuation agents in order to justify the process.

  • History of Phoenixing – One of the main items on their ‘list’ is whether or not the new owners have a history of setting up phoenix companies to avoid paying debts, especially taxes which are rightfully due to HM Customs & Revenue.

  • Debts Being Paid – Another of the big triggers that will garner their attention is when a phoenix company pays ‘some’ debts but not all. For example, are only key suppliers being paid in order to keep the business running or is there an attempt to pay something, albeit a small amount, to all creditors?

  • Compensations to Connected Persons/Entities – If certain persons or companies directly associated with the phoenix companies are being paid, what does that say to the taxman when contributions are not being paid? This paints a picture of FRAUD in big, bold neon letters.

  • Directors’ Salaries – This is most likely the prime indicator that directors are not acting responsibly or ethically. If taxes are not getting paid and only important suppliers are getting their money but directors are receiving inordinately high salaries, HMRC are going to take notice right away. These are the directors who can expect a Personal Liability Notice.

Whilst it is true that owners can walk away from a pre pack administration phoenix sale almost unscathed, if their sole intent is to also walk away from debts in order to continue operating under a new guise, this is highly illegal. Also, it isn’t only directors of phoenix companies who can receive a Personal Liability Notice. Current directors who have a history of Phoenixing and pose a current risk may also receive a notice if contributions are not being paid timely.

Can a Personal Liability Notice Be Challenged?

Challenging Personal Liability Notice procedures can be a bit complex because the investigating officers will have gone through a company’s books quite intensively and will likely have plenty of ‘support’ for their allegations. If you are the director of a company, or a de facto (acting) director or member who has been served a PLN, it is imperative that you seek help and advice before making an appeal. Real Business Rescue has helped countless businesses in the UK successfully challenge PLNs and we will tell you right up front if we believe you have grounds for an appeal. The initial consultation is free, so don’t hesitate to call on us for expert advice. Personal Liability Notices are challenged all the time, but success is based on having solid evidence on your side. We can help.


Who we help

  • Company Directors
  • Finance Directors
  • Sole Traders
  • Accountants
  • Small Businesses
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Contact our team

Jonathan Munnery
Andrew MacKenzie
Julie Palmer
Thomas Mckay
Keith Tully
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