Directors Jointly and Severally Liable for Evading Company Tax
Published / Last Updated on 30/11/2021
The Finance Act 2020 gave HMRC additional powers to deter the use of deliberate tax avoidance or tax evasion.
For example, it has been regularly seen that directors ‘strip’ limited companies of assets before moving the company into insolvency to avoid and evade both corporation taxes and other liabilities.
HMRC’s New Guidance on Individuals Being Jointly or Severally Liable
HMRC guidance suggests that if directors personally benefit from any tax avoidance or tax evasion they will be held individually (severally) or jointly liable for the whole tax debts.
In particular, when using tax avoidance schemes or engaging in tax evasive conduct.
HMRC Notice
HMRC will issue either an Individual Liability Notice or a Joint Liability Notice. This will include details of the amounts plus any fines or late payment interest. If only an individual notice is issued, you will be held solely responsible for the debt.
30 Day Appeal
You will have 30 days only to either appeal or pay the notice but you will need to supply evidence to merit the witjhdrawal of the notice.
