legal focus 19
Prepared for the HMRC’s crackdown?
The HMRC’s announcement of a crackdown on football clubs, such as Portsmouth FC, for outstanding payments, should serve as a warning to other business directors of their responsibilities says Hampshire-based law firm Moore Blatch.
There is a strong possibility that directors could face proceedings if significant company payments to HMRC are outstanding.
“Whilst football clubs are high-profile offenders at the moment, any director of a business that owes sums to the HMRC could face proceedings, if their conduct is found to be irregular,“ comments Lisa Saxby, insolvency solicitor.
The consequences for directors are extremely serious and could result in a number of actions by the HMRC:
• Disqualification – the Department of Trade and Industry is able to bring director disqualification proceedings where there has been a deliberate failure to pay HMRC debts. If found guilty, an individual can be prevented from acting as a director for a period of between two to 14 years.
• Personal liability notice – where the HMRC considers that the non-payment of PAYE deductions and NI contributions is due to negligence or fraud, they are able to issue a personal liability notice (PLN). A PLN has the effect of making a director personally liable for the company’s unpaid taxes and is normally limited to serious fraud.
• Security deposits – HMRC has the power to demand a security deposit for future tax liabilities where a company has a history of owing money to HMRC. It is a criminal offence to continue to trade without paying a security deposit. This is normally issued in relation to outstanding VAT payments, but will be extended to PAYE and NIC contributions from April 2012.
“The potential effect of any outstanding payments to the HMRC on businesses and directors themselves should not be underestimated.
“If a company does owe money to the HMRC, making early contact to find a suitable solution is always advisable to try and avoid proceedings and additional costs,“ concludes Saxby.
A rising demand for insolvency work has led Moore Blatch to appoint talented solicitor, Lisa Saxby, to its insolvency team. With over two year’s specific insolvency experience, Saxby will be based at Moore Blatch’s Southampton office and will assist head of insolvency Mark Osgood. Working closely with insolvency practitioners, she will provide advice on corporate and personal insolvencies and is also able to deal with disputes on behalf of directors, creditors and debtors individually. Mark Osgood comments: “Both personal and corporate insolvencies are expected to continue to increase in 2011. This growing demand for insolvency expertise has led to a significant increase in work for the department.“
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11 The Avenue, Southampton, Hampshire SO17 1XF Telephone: +44 (0)23 8071 8000
www.mooreblatch.com Offices also in Lymington, Whiteley & Richmond-upon-Thames
Charles Cantoni - Land Development David Thompson - Health & Safety Katherine Maxwell - Employment Paul Walshe - Lender Services
THE BUSINESS MAGAZINE – SOLENT & SOUTH CENTRAL – MAY 2011
www.businessmag.co.uk
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