There is some – at least, anecdotal – evidence that HMRC have recently been making much greater use of their powers to make directors personally liable for the national insurance debts of their failed companies. The power derives from section 121C of the Social Security Administration Act 1992, which allows HMRC to issue personal liability notices (PLNs) when a company has failed to pay NI contributions and that failure is “attributable to the fraud or neglect of one or more individuals who were, at the time of the fraud or neglect, officers of the company” (known as “culpable officers”).
The curse of Albert Square
Should we open an office in the London Borough of Walford? It’s probably about 12 years or so since the BBC soap Eastenders ran a story-line in which would-be catering magnate, Ian Beale, became bankrupt. His then squeeze, Laura, bought back his fish and chip shop from the Official Receiver enabling the business to continue. But 2013 has seen a rash of real-life bankruptcies of past and current Eastenders stars.
It’s been an odd few years…
Given the state of the British economy and the difficult business climate, you might have expected insolvency practitioners to be rushed off their feet. In fact, the level of business insolvencies, both company insolvency and for individuals, has been remarkably low.
Time to Pay: On the Way?
There was a time when it was fairly easy to agree a time to pay arrangement with HMRC. It was simply a matter of ringing up, asking politely, and the answer was “yes” without too many searching questions.
How times change. It’s probably fair to say that, in the early days, HMRC managed to provide a cash flow boost to businesses that had no particular cash flow problems whilst, at the other extreme, putting off the evil day for a number of hopeless basket cases.
Public Bodies, Vulnerable Clients and the Disability Discrimination Act
Does the decision in the recent case of Haworth v Cartmel have implications far beyond insolvency in terms of the way HMRC (and other public bodies) deal with vulnerable individuals?
Ms Haworth suffered from mental health issues, including a phobia of opening letters. In August 2005, HMRC received an anonymous tip-off that she was trading as a commercial horse breeder, and they subsequently raised a Determination claiming £192,000 in undeclared tax.