HMRC have significantly increased their use of joint and several liability notices to recover tax debts from individual directors where the company has become, or is likely to become, insolvent. Pinsent Masons highlights a 225% increase, with directors personally targeted for £290,000 on average in 2023/24.
The rationale behind the joint and several liability powers is to deter individuals from using the insolvency rules to close a business where outstanding tax is due. The firm notes that, given the increase in company insolvencies in recent years, more directors could be pursued for their companies’ tax debts.
Sophie Warren, Senior Tax Manager at Pinsent Masons said: ‘HMRC is making clear that company directors whose businesses leave large unpaid tax bills behind after they close where there is evidence of deliberate behaviour will not walk away without paying up.
‘It is clear now that they are willing to go after whichever of the directors and other individuals connected with the management of the company who has sufficient personal assets to pay’, she added.
HMRC have significantly increased their use of joint and several liability notices to recover tax debts from individual directors where the company has become, or is likely to become, insolvent. Pinsent Masons highlights a 225% increase, with directors personally targeted for £290,000 on average in 2023/24.
The rationale behind the joint and several liability powers is to deter individuals from using the insolvency rules to close a business where outstanding tax is due. The firm notes that, given the increase in company insolvencies in recent years, more directors could be pursued for their companies’ tax debts.
Sophie Warren, Senior Tax Manager at Pinsent Masons said: ‘HMRC is making clear that company directors whose businesses leave large unpaid tax bills behind after they close where there is evidence of deliberate behaviour will not walk away without paying up.
‘It is clear now that they are willing to go after whichever of the directors and other individuals connected with the management of the company who has sufficient personal assets to pay’, she added.
