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The PLNs
The PLNs
On 18 April 2023, the officer issued a decision letter confirming that a formal decision had been made to issue a PLN.
In summary, the decision to treat the appellant as a “culpable officer” was reached on the basis that
HMRC considered that there was sufficient evidence to demonstrate that the Company’s failure to pay the NICs due in the tax years under appeal, was attributable to his neglect and, in particular, his failure to comply with his statutory duties as a director to ensure that payment of the NICs was made every month.
The Company had failed to pay the NICs declared as being due in its monthly Real Time Information (“RTI”) Returns from February 2019 until August 2021. According to those Returns, the total net PAYE tax and NICs declared as due during that period was £392,548.20.
An analysis of the Company’s bank statements showed receipts for £5,777,715.97 in the period in question, yet only £11,560.32 was paid to HMRC.
During that period the Company had made payments totalling £878,505.69 to, what the Officer believed were, a connected person and connected businesses.
For the period 1 March 2020 to 31 August 2021, the Company had made claims to HMRC under the Coronavirus Job Retention Scheme (“CJRS”) and as a result of those claims, HMRC had made payments totalling £707,942.37 to the Company. Those CJRS payments included an amount to help meet the PAYE tax and NICs due on the furloughed employees’ wages.
During the period January 2020 to August 2021, the level of monthly PAYE tax and NICs significantly increased.
The letter included a Notice of Liability under section 121C SSSA 1992 which stated that the appellant was due to pay £231,723.42 to HMRC by no later than 18 May 2021.
The letter included the following paragraph:-
“What to do if you disagree
If you disagree with my decision to issue you with a Personal Liability Notice you can appeal by writing to me. You need to do this within 30 days of the date of this letter telling me why … specifying one or more of the grounds of appeal as specified at Section 121D of the Social Security Administration Act 1992”.
The letter also included a template for a Notice of Appeal and stated that could be used to appeal and also indicated where further information on appeals could be found.
No appeal was lodged and no payment was made.
On 30 May 2023, Officer Love wrote to the appellant referring to the letter of 18 April 2023 and stating that in the absence of any response, HRMC assumed that the appellant did not wish to take the matter further and appeal the decision to issue a PLN. Accordingly, the matter would be treated as settled by agreement under Regulation 11 of the Social Security Contributions (Decisions and Appeals) Regulations 1999 (“the Regulations”). That letter included the following paragraph:
“Making an Appeal
If you wish to make a late appeal against the decision to issue you with a Personal Liability Notice under the legislation at section 121C above, then it is important that you do so without undue delay following receipt of this letter. As you are now outside the statutory 30-day appeal period, in addition to making an ‘appeal to HMRC’ you will also need to include an application for the admission of a ‘late appeal’”.
On 15 June 2023, Officer Love reissued the PLN to the appellant, having identified an incorrect payment date on the original PLN. He pointed out that the issue of the amended PLN also opened a new right of appeal which ran from 15 June 2023.
That letter also included the following paragraph:
“What to do if you disagree
If you disagree with my decision to issue you with a Personal Liability Notice you can appeal by writing to me. You need to do this within 30 days of the date of this letter telling me why you think my decision is wrong, and by clearly specifying one or more of the grounds of appeal as specified at Section 121D of the Social Security Administration Act 1992…”.
The Officer went on to summarise that section and identify the four possible grounds of grounds of appeal as being:
“(a) The whole or part of the amount specified in the Notice does not represent contributions to which Section 121C should be applied;
(b) The failure to pay the contributions specified in the Notice was not attributable to any fraud or neglect on your part;
(c) You are not an officer of the company at the time of the alleged fraud or neglect;
(d) The opinion formed by HMRC in terms of the apportionment of the unpaid contributions between one or more culpable officers was unreasonable.”.
The officer enclosed another Notice of Appeal template.
On 2 August 2023, the officer again wrote to the appellant pointing out that the letter of 15 June 2023 had advised him about his rights of appeal and that no appeal had been received. He again said that the matter would be treated as settled by agreement. The letter went on to state:
“Making an Appeal
If you wish to make a late appeal against the decision to issue you with a Personal Liability Notice under the legislation at Section 121C above, then it is important that you do so without undue delay following receipt of this letter. As you are now outside the statutory 30-day appeal period, in addition to making an ‘appeal to HMRC’ you will also need to include an application for the admission of a ‘late appeal’.
If you wish HMRC to consider acceptance of a late appeal, you will need to explain why the appeal is being made late and show that the appeal is being made without any further undue delay.”
The letter went on to refer to HMRC’s guidance on late appeals and enclosed a copy of part of that.
On 24 August 2023, as no appeal or response had been received, the officer wrote to the appellant referring to the letters of 15 June and 2 August 2023 informing him that the enquiry was now closed and the matter of the PLN was treated as settled in terms of the Regulations.