11 March 11

The Taxman Turns Nasty!

A recent legal case has seen a company director being asked to pay over £60,000 of unpaid national insurance contributions even though the liability was within a limited company.

The case surrounded the use of HMRC´s powers under the little-known Social Security Administration Act 1992, which is the piece of legislation which governs what happens to various benefits, including national insurance. Under section 121 C of this legislation HMRC can issue negligent directors with "Personal Liability Notices" and demand payment of unpaid contributions.

The court made the decision in HMRC´s favour as the amounts had remained unpaid for a year whilst other creditors (including the director himself) had been paid in full.

In our experience the use of this piece of legislation is quite rare and HMRC have been quoted as saying that they will only use this power in cases of "serious" neglect. Nevertheless, directors should not take the consequences of their responsibilities lightly in the face of unpaid national insurance or other tax bills.

If you are unable to pay tax bills of any description please contact Dodd Rescue.