What is a personal liability notice?

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Fraud or neglect of a director or shareholder or officer!

The personal liability notice was introduced by Section 64 of the Social Security Act 1998 and came in to effect from 6th April 2009. The personal liability notice system was introduced to tackle perceived abuse of the National Insurance system and to act as a deterrent to future abuse and losses to the National Insurance Fund.

A notice can be issued, where in the opinion of HMRC, there is sufficient evidence to show ‘on the balance of probabilities’ that the company failure to pay the National Insurance contributions due was attributable to the neglect of fraud of an individual who was an ‘officer’ of the company at the time of the failure. HMRC describes the officers as ‘culpable officers’ in the personal liability notice.

The right of recovery by personal liability notice includes all Contributions payable by the company for both the directors and the employees and includes:

  • Employers and employee National Insurance contributions
  • Class 1A & Class 1B National Insurance contributions
  • Interest in respect of National Insurance contributions
  • Penalties in respect of National Insurance contributions

Any individual issued with a personal liability notice becomes personally liable for the company National Insurance Contributions debt specified in the notice.


A specialist team at HMRC carries out investigations and has responsibility for the issue of Personal Liability Notices.

The team issuing personal liability notices is based in London but covers the whole of the UK; they are very specialized and particularly competent in the area of personal liability notices.


An Inspector from HMRC will:

  • Examine the company books and records.
  • Invite representations from the officers of the company to find out the reasons for the failure to pay, with a view to finding a reason to issue a personal liability notice.
  • Determine the facts and circumstances surrounding the company failure to pay the National Insurance Contributions with a view to establishing the grounds to issue a personal liability notice.
  • Consider the extent of the negligence or fraud of each officer in the Company for the personal liability notice.


An early defence prior to the issue of a PLN or any tribunal is recommended

A meeting with Lindsay can determine you chances of success




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