Subjective or objective?

A company went into liquidation in 2007 owing more than £290 000 in National Insurance (NI) contributions.

HMRC issued a notice under Social Security Administration Act 1992 s 121C(1)(b) to the taxpayer who had been the business’s finance director stating he was liable for most of the debt.

He appealed claiming he had not been guilty of fraud or neglect and that his actions at the time of the company’s failure to pay the NI had been affected by mental illness. He wished to produce evidence to confirm his illness and insisted he should not be held responsible for his actions.

The First-tier Tribunal (FTT) held that neglect for the purposes of s 121C was subjective and medical evidence should be permissible.

The Revenue appealed to the Upper Tribunal which noted that fundamental to the FTT’s approach had been “characterisation of s 121C as...