HMRC Says You're Personally Liable For Your Company's Tax: Personal Liability And Joint Liability Notices

HMRC can sometimes make a director personally pay what a company owes, by notice: a personal liability notice (PLN) for its unpaid National Insurance or for a company penalty, or a joint and several liability notice (JLN) for its tax. Former and shadow directors can get one too; some notices also reach managers, company secretaries and shareholders.

You can challenge each of these, and HMRC must prove the case against you personally. Where your challenge goes depends on the notice:

• National Insurance notice: write to HMRC within 30 days of the date it was issued.
• Penalty notice: within 30 days, write to HMRC if the penalty was for income tax, PAYE or corporation tax; appeal to the tribunal if it was for VAT or excise duty.
• JLN: within 30 days, appeal to the tribunal or ask HMRC to review it first, but not both at once.

Count from the date on the notice, not the day you read it. Missed it? The table below gives each late route.

On this page:

• Which Notice?
• National Insurance
• Company Penalties
• JLNs
• Who Proves What
• Paying And Bankruptcy
• What To Do Now

Which Notice Have You Got?

HMRC asked about your role but sent no notice? Reply with evidence, taking advice first if HMRC suggest you acted deliberately: it is your first chance to stop one (NIM12208; for penalties, CH84615). More than one notice? Each needs its own appeal, by its own route.

Rarer Notices

• VAT fraud "decision notice": part of a company's penalty for deals connected with VAT fraud (section 69D VATA 1994, from 16 November 2017), often after a refused input tax claim. HMRC must warn you first. Appeal to the tribunal.
• CIS officer "decision notice": part of a company's construction industry scheme penalty (section 72B FA 2004, from 6 April 2026). HMRC must warn you first. Appeal in writing to HMRC; you can argue the company was not liable to the penalty (section 72C(1)(a)).
• PAYE "personal liability notice": a company's unpaid PAYE on travel expenses of workers supplied through intermediaries (regulations 97ZI-97ZJ, PAYE Regulations; ESM5670). No fault is needed. Appeal to HMRC on two grounds only: it is not a "relevant PAYE debt", or you were not a director on the relevant date.

Each must be appealed within 30 days.

National Insurance Personal Liability Notices

HMRC can serve this notice if the company failed to pay its National Insurance on time and the failure is "attributable to fraud or neglect" by you while you were an officer (section 121C). It covers the company's contributions, with interest and penalties (NIM12202), not its PAYE income tax.

An officer is "any director, manager, secretary or other similar officer ... or any person purporting to act as such" (section 121C(9)). HMRC's guidance reads "purporting" as covering shadow and de facto directors, who direct the company without being appointed (NIM12203).

HMRC's guidance says they issue notices only for "fraud or serious neglect" (NIM12204), but the law asks only whether there was neglect. In HMRC v O'Rorke [2013] UKUT 499 (TCC), the Upper Tribunal held that neglect is judged objectively, against what a reasonable person would have done: "it is a standard of conduct, not a subjective state of mind" ([62], [69]).

Your evidence needs to answer the warning signs HMRC look for, such as long periods without paying PAYE or National Insurance; paying directors, connected businesses or other creditors instead; and links to other failed companies (NIM12204).

Where several officers are at fault, HMRC split the debt by degree of blame (section 121C(3)-(4)), "without taking account of each individual's ability to pay" (NIM12209). If the company later pays, for example through its liquidator, your notice is reduced and any overpayment repaid with interest (section 121C(7)). Resigning does not end liability for neglect while you held office.

You can appeal on four grounds only (section 121D(1)-(2)):

• (a) the amount "does not represent contributions to which that section applies";
• (b) the failure was not due to fraud or neglect by you;
• (c) you were not an officer at the time;
• (d) HMRC's view that you alone were to blame, or their split between officers, was unreasonable.

If your appeal rests on evidence HMRC never considered, or on ground (d), and does not succeed on another ground, the tribunal can only dismiss it or send it back to HMRC with recommendations (section 121D(5)). So give HMRC your evidence early: with your appeal letter, when they invite representations, or during a review.

Appealing. Write to the HMRC officer who issued the notice within 30 days after the date it was issued, with your grounds (section 12 Social Security Contributions (Transfer of Functions, etc.) Act 1999); there is no form (DANSP51100). If HMRC offer a review, accept within 30 days or take your appeal to the tribunal, or HMRC's view is treated as agreed (section 49C TMA 1970, applied by regulation 7(2) of SI 1999/1027). If you are late, ask HMRC first, then the tribunal (regulation 9).

Personal Liability For A Company Penalty

Where a company's inaccuracy penalty is "for a deliberate inaccuracy which was attributable to an officer", HMRC can make that officer pay all or part of it, up to the whole, by written notice (Schedule 24 FA 2007, paragraph 19(1)). Schedule 41 FA 2008, paragraph 22(1) does the same where a failure-to-notify penalty, or one of some VAT and excise wrongdoing penalties, is for a "deliberate act or failure". Late-filing and late-payment penalties have no officer notice, though a National Insurance notice can include penalties on unpaid contributions (section 121C(9)) and a JLN can cover penalties.

An officer here is a director (including a shadow director), manager, company secretary or LLP member (paragraph 19(3)-(3A)).

The company's penalty must itself be for deliberate behaviour; for an inaccuracy, that means an intention to mislead HMRC (HMRC v Tooth [2021] UKSC 17). Careless behaviour is not enough. The behaviour must also be down to you: HMRC's guidance says signing the return is not in itself evidence of that, and officers must be asked directly about their involvement (CH84615).

HMRC's guidance allows a notice only where the officer gained or tried to gain personally, or the company is insolvent or likely to be (CH84610). Normal salary or dividends do not usually count as personal gain (CH84635), and a notice is "not appropriate" after a solvent (members' voluntary) liquidation (CH84645).

No case we have found decides whether the tribunal enforces these guidance limits, and HMRC's guidance says officers cannot specifically appeal them (CH84665; CH75650); raise any breach in your appeal and in any review anyway. The time limit is statutory: HMRC must give the notice within the same time limit as the company's penalty (Schedule 24 paragraph 13(3), applied by paragraph 19(5)(c); Schedule 41 paragraph 16(4), applied by paragraph 22(5)(c)).

On your share, HMRC's guidance says the notice must explain how they calculated it (CH406300), it should not rise because a co-director does not pay, and if the company pays the whole penalty, "that is the end of the matter" (CH406200). Special reduction for special circumstances applies to your share, but inability to pay never counts (Schedule 24 paragraph 11(2)(a); Schedule 41 paragraph 14(2)(a)).

Appealing. The route follows the tax behind the penalty (Schedule 24 paragraph 16(1); Schedule 41 paragraph 18(1)). For income tax, PAYE or corporation tax (direct taxes), appeal to HMRC; if they offer a review, accept within 30 days or take your appeal to the tribunal, or HMRC's view is treated as agreed (section 49C(4) TMA 1970). For VAT or excise, accept a review within 30 days (section 83C VATA 1994; section 15C FA 1994) or appeal to the tribunal. Miss both and nothing is treated as agreed, but you then need a late review, which HMRC must give if you had a reasonable excuse and asked without unreasonable delay once the excuse ended (section 83E; section 15E), or the tribunal's permission (section 83G(6); section 16(1F)).

Joint And Several Liability Notices

A JLN makes you liable, with the company and anyone else given one, for the amount its type of notice covers (below), which can include penalties and interest (paragraph 19). The law (Finance Act 2020, section 100 and Schedule 13) calls it a "joint liability notice". Unlike a PLN, it sets no share: HMRC "will pursue all individuals for the amount owed ... against whichever of them has sufficient assets to pay" (GOV.UK).

It cannot cover tax for periods ending before 22 July 2020, or from events before then (section 100(2)). It can go to directors, shadow directors, LLP members and participators (people with a stake in the company, such as shareholders); some notices also reach anyone "concerned ... in the management". There are three types:

• Avoidance or evasion (paragraph 2): the company used avoidance schemes of the kinds listed in paragraph 6 (such as those caught by a follower notice) or deliberately misled HMRC or failed to notify them; it is insolvent, or there is "a serious possibility" it will be; you were responsible, knowingly benefited, or helped; and there is a serious possibility the tax will not be paid. It covers the tax linked to the avoidance or evasion (paragraph 2(12)), and must give HMRC's reasons (paragraph 2(8)).
• Repeated insolvency (paragraph 3): in the five years before the notice, at least two companies you were connected with became insolvent owing tax or with returns outstanding, a new company you are connected with does the same or similar work, and the insolvent companies' tax debts exceed both £10,000 and 50% of what they owe unsecured creditors. HMRC must issue it within two years of first having enough facts (paragraph 3(2)). It covers the new company's tax owed on the day of the notice and arising over the next five years while the notice lasts, as well as the insolvent companies' unpaid tax (paragraph 3(7)-(8)).
• Facilitation penalties (paragraph 5): a company penalty for promoting or enabling avoidance or evasion, where the company is or may become insolvent. It covers that penalty.

HMRC must withdraw a notice, and the tribunal must set it aside, if a condition was not met when it was given or it is "not necessary for the protection of the revenue" (paragraphs 10 and 14(1)). If it ends only because it is no longer needed, money already paid is not refunded (paragraphs 10(8) and 14(3)).

HMRC's repeated-insolvency guidance says they will not give notices to turnaround specialists in a genuine rescue, or to connected people who acted in good faith with no material influence. The only decision on these notices we have found (October 2026) is Hall v HMRC [2026] UKFTT 124 (TC), a preliminary ruling by one First-tier Tribunal judge that binds no other tribunal. It accepted that arguments that a notice was irrational, disproportionate or contrary to HMRC's guidance can be heard ([2], [79]), though the judge did not think the irrationality and guidance arguments strong ([88]).

Review or appeal. You can accept HMRC's offer of a review within 30 days of the day the notice is given (paragraph 11; HMRC can extend this), or appeal to the tribunal within 30 days (paragraph 13(2)), but GOV.UK says you cannot do both "at the same time". If the review upholds or varies the notice, you have 30 days from its conclusion to appeal (paragraph 13(3)). A review cannot look at the company's tax (paragraph 12(5)). If you miss the review window, HMRC must still review the notice if you had a reasonable excuse and asked without unreasonable delay once the excuse ended (paragraph 11(4)); otherwise only the tribunal can let you appeal late (paragraph 13(6)). If the notice says the amount will follow, the later notice has its own review and appeal window, so challenge that one too (paragraphs 2(9)-(11) and 5(8)-(10)).

The company's tax. You cannot dispute it in your JLN appeal (paragraph 14(2)). The only route is paragraph 15, if the company is in an insolvency procedure such as liquidation: you can join an appeal it has under way, and continue it if the company cannot or will not. If it has not appealed, you can make the appeal the company could have made against its tax, in your own name (to HMRC or the tribunal, as that tax's appeals go), within 30 days of the day the JLN is given, even if the company's time limit has passed; that clock does not wait for a review. In Hall, the director had not done so, and the companies' tax was "taken as a given" ([80]).

Who Has To Prove What

The standard is the balance of probabilities (more likely than not), even where HMRC allege deliberate behaviour (Hackett v HMRC [2020] UKUT 212 (TCC) at [88]-[90]).

At the time of writing (October 2026), the penalty row above is the Court of Appeal's rule in Sintra ([130]), reversing the tribunals below ([2]), and the Supreme Court is due to hear a further appeal on 2-3 November 2026. If you are reading this later, check whether it has decided.

Challenging The Company's Own Tax

On a penalty notice, HMRC accept that you can generally challenge the company's tax, unless that would be an abuse of process, an unfair use of the tribunal (Sintra [107]). Re-arguing points already decided in the company's own appeal may be such an abuse: in Hackett, the First-tier Tribunal treated it as one, and the director's lawyer did not dispute that on appeal ([1], [93]). If the liquidator chose not to appeal, you can still raise it, but you must prove it. On a National Insurance notice it falls under ground (a), with the burden on HMRC.

Paying, Interest And The Risk Of Bankruptcy

Penalty notices. Your share is due within 30 days of the notice (Schedule 24 paragraph 19(5)(b); Schedule 41 paragraph 22(5)(b)), though payment is not a condition of your appeal being heard (Schedule 24 paragraph 16(2)(a); Schedule 41 paragraph 18(2)(a)). Once you have appealed, HMRC's guidance says you will not have to pay until the appeal is settled (GOV.UK; CH406300). That is HMRC practice, not a pause in the law, so appeal in time.

National Insurance notices. Section 55 TMA 1970 postponement does not apply, but HMRC's guidance says you can ask in your appeal for the disputed amount to be postponed (NIM12212). Interest runs from the date the notice was issued (section 121C(5)), and nothing pauses it while you appeal. If HMRC sue while your appeal, or your time to appeal, is still running, the court must adjourn (section 117A(4)-(5)), but the debt itself is not paused.

JLNs. Nothing in Schedule 13 pauses collection; ask HMRC in writing.

If you do nothing. An unappealed notice is a debt HMRC can enforce, and in court an unappealed National Insurance decision is "conclusive" (section 117A(2)).

In Pawar v HMRC [2025] UKUT 309 (TCC), a director and shareholder appealed a notice for the whole of a £874,238 VAT penalty more than three years late, after a statutory demand (a formal demand that can lead to bankruptcy) for over £1.1 million ([2]-[3], [25]). The Upper Tribunal weighed the risk of bankruptcy but refused: his prospects of substantially reducing the notice were "not obviously strong" ([106]). The test is in our late appeals guide and Martland analysis.

Statutory demands. In England and Wales, GOV.UK says you must apply to challenge a statutory demand within 18 days if you were in the UK when you got it. Get free debt advice at once: GOV.UK's options for dealing with your debts page points to MoneyHelper, and the Insolvency Service runs an enquiry line (statutory demands).

What To Do Now

1. Check the notice: the law it cites and its date. Diarise the deadline.
2. Appeal in writing, in time, to the right place, with your grounds: HMRC for National Insurance and direct-tax penalty notices; the tribunal for VAT or excise penalty notices and JLNs, online or on form T240. Keep proof of sending.
3. Watch the review window. If HMRC offer a review of a National Insurance or direct-tax penalty notice, accept within 30 days or take it to the tribunal, or HMRC's view stands. On a JLN, choose a review or an appeal, not both at once. If a review goes against you, you have 30 days from its conclusion to go to the tribunal.
4. On a JLN, if the company is in an insolvency procedure and has not appealed, decide within 30 days whether to appeal the company's tax in your own name.
5. Ask HMRC for their workings: how they calculated or split your share, and why they say it is down to you.
6. Get the records (don't wait for them before appealing): your HMRC file through a subject access request; company records from the liquidator, and whether the company appealed; your appointment and resignation dates from Companies House.
7. Gather evidence of who did what: who ran payroll and VAT, board minutes, emails about paying HMRC, bank statements showing where the money went, and any advice you took.
8. Deal with payment. Penalty notice (Schedule 24 or 41): appeal in time, and HMRC's guidance says you won't have to pay while the appeal is open. National Insurance notice: ask HMRC to hold collection (interest still runs). JLN: ask in writing. Statutory demand: act within the GOV.UK window and get free debt advice.
9. If you are late, use your notice's late route from the table at once, and explain the whole delay.
10. Get help, and keep the case alive. Check whether TaxAid can help (it has an income limit and cannot help with corporation tax for limited companies), and see our representation guide and, for the costs risk (each side usually bears its own), tracks and costs. Meet every tribunal direction: PLN appeals have been struck out for not co-operating.

Key Legislation And Resources

Legislation

• Section 121C Social Security Administration Act 1992—National Insurance personal liability notices, apportionment and interest
• Section 121D Social Security Administration Act 1992—the four grounds of appeal, the burden of proof and the evidence rule
• Section 117A Social Security Administration Act 1992—court recovery while an appeal is pending
• Section 12 Social Security Contributions (Transfer of Functions, etc.) Act 1999—appealing a National Insurance decision
• Regulation 7 and regulation 9 of SI 1999/1027—reviews and late appeals for National Insurance decisions
• Schedule 24 FA 2007, paragraph 19—officer liability for a company's deliberate inaccuracy penalty
• Schedule 41 FA 2008, paragraph 22 and paragraph 18—officer liability for a deliberate act or failure; appeals and payment
• Section 83C VATA 1994 and section 83G VATA 1994—VAT reviews and appeals
• Section 16 FA 1994—excise appeals
• Section 69D VATA 1994—officer decision notices for VAT fraud penalties
• Section 100 FA 2020 and Schedule 13 FA 2020—joint liability notices
• Section 72C FA 2004—appeals against CIS officer decision notices

Key Cases

• HMRC v Sintra Global Inc [2025] EWCA Civ 1661—HMRC prove the facts behind the penalty and the officer's part in it; the appellant proves any error in the company's tax; Supreme Court hearing due 2-3 November 2026
• HMRC v O'Rorke [2013] UKUT 499 (TCC)—neglect for a National Insurance notice is judged objectively
• Hall v HMRC [2026] UKFTT 124 (TC)—a preliminary ruling on a repeated-insolvency JLN: burden on HMRC, the company's tax taken as given, public law arguments can be heard
• Pawar v HMRC [2025] UKUT 309 (TCC)—a VAT penalty notice appealed over three years late; permission refused despite the risk of bankruptcy
• Hackett v HMRC [2020] UKUT 212 (TCC)—the civil standard of proof applies to deliberate behaviour; re-arguing the company's decided appeal
• HMRC v Tooth [2021] UKSC 17—what "deliberate" means; our analysis

HMRC Guidance

• NIM12204—when HMRC issue a National Insurance personal liability notice, and what they look at
• NIM12212—appeals, and asking for the disputed amount to be postponed
• CH84610—when HMRC may issue company officer penalty notices
• CH406300—the officer's notice, the calculation and standing the penalty over on appeal

GOV.UK Guidance

• Overview of joint and several liability notices—who can get one, reviews and appeals
• Joint and several liability notices for repeated insolvency—the conditions, and who HMRC will not pursue
• Joint and several liability notices for tax avoidance and tax evasion—the conditions, with examples
• Delay payment during appeals and reviews—paying a penalty while you appeal
• Statutory demands and challenging a statutory demand—England and Wales
• Options for dealing with your debts—free debt advice
• Director information hub—HMRC's pages for company directors
• HMRC subject access request—getting the information HMRC hold about you

On This Site

• What Is The Tax Tribunal?—how the First-tier Tribunal (Tax Chamber) works
• HMRC's Internal Review—the review and its acceptance window
• Missed The Deadline? Late Appeals—HMRC first, or the tribunal's permission
• Martland v HMRC—how the tribunal decides whether to allow a late appeal
• Postponing Payment During An Appeal—section 55 and informal standover
• Interest On Unpaid Tax—how HMRC charge interest
• HMRC Penalties Explained—the company penalty behind a notice
• Reducing HMRC Penalties—special reduction and the other levers
• HMRC Penalties For Undeclared Income—failure-to-notify penalties
• HMRC v Tooth—what "deliberate" means
• BPP Holdings v HMRC—why tribunal directions matter
• Form T240 and How To Appeal To The Tax Tribunal—filing an appeal with the tribunal
• Writing Your Grounds Of Appeal—what to put in your appeal
• Do You Need A Representative At The Tax Tribunal?—free and paid help
• Tax Tribunal Tracks And Costs—when costs can be awarded
• VAT Input Tax Appeals—refused VAT reclaims, often the start of a VAT fraud penalty
• Accelerated Payment Notices And Follower Notices—avoidance schemes that can lead to a JLN

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax adviser, accountant, or solicitor.