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When can a director be held personally liable for tax debts?

23 May 2022 / Mala Kapacee
Issue: 4841 / Categories: Comment & Analysis
Personally liable

Key points

  • In some circumstances HMRC may hold directors of a company personally liable for corporate debts.
  • Advisers should be aware of when HMRC is required to evidence behaviour the behaviour threshold (if any) and how the notices can be appealed.
  • HMRC can issue personal liability notices where the tax at stake is held on behalf of HMRC by a company (PAYE income tax National Insurance and VAT).
  • In the Finance Act 2020 legislation was enacted to allow HMRC to shift outstanding tax debts for an insolvent (or likely to be insolvent) company onto the directors.
  • A taxpayer may request a review of a personal liability notice. HMRC has 45 days to issue the result and if the department does not respond the notice is treated as upheld.
  • Common grounds of appeal are behaviour or for VAT fraud that the director could not have...

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