HMRC Pursuing Officers Of A Company Personally

Directors should take care when dealing with any obligation of the company in respect of tax affairs as HMRC are increasingly using its powers pursuant to Schedule 41 of the Finance Act to seek recovery of  lost revenue personally from an officer of a company. In an insolvency situation or where the company has been struck off, HMRC will consider ways to recover lost revenue from directors personally.

For example, if a company breaches its obligation to give notice of liability in relation to income tax and capital gains tax and/or fails to give notice of chargeability for corporation tax or VAT, an HMRC penalty can be issued  for a deliberate act or failure which can be attributable to an officer of the company. Such officer may be liable to pay such portion of the penalty (which may be 100% of the potential lost revenue) as HMRC specifies.

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Such events as above may occur when a company is liquidated and/or ceases trading, which in turn would leave HMRC unable to revenue direct. This would lead to them  looking elsewhere and in certain scenarios to the officer who carried out the deliberate act.

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