A Personal Liability Notice (PLN) can make a company officer personally responsible for certain liabilities that would otherwise be payable by the company.

PLNs can arise in a number of circumstances, including unpaid National Insurance contributions (NICs) and certain penalties relating to deliberate tax non-compliance. The rules are statutory and the conditions HMRC must satisfy depend on the particular PLN regime being used.

Receiving a PLN does not necessarily mean that HMRC’s conclusions are correct. Company officers should understand the basis on which the notice has been issued, the evidence relied upon by HMRC and the options available to challenge it.

What is a Personal Liability Notice?

A Personal Liability Notice is a mechanism through which HMRC can, in certain circumstances, make a company officer personally liable for an amount that would otherwise be the responsibility of the company.

There is not one single PLN regime. Different legislation applies depending on the nature of the underlying liability.

There are also separate provisions allowing HMRC to transfer liability for certain company penalties to company officers.

For example, where a company is liable to a penalty for a deliberate inaccuracy and that inaccuracy is attributable to an officer, the officer may become personally liable for all or part of the penalty where the officer has gained or attempted to gain personally, or where the company is insolvent or likely to become insolvent. HMRC’s guidance also refers to company-officer liability in relation to certain failure to notify and wrongdoing penalties.

The distinction is important because a PLN does not automatically make an individual personally liable for the underlying company tax debt itself. In some cases, it is the company’s penalty that is being transferred to the officer rather than the underlying tax liability.

When can HMRC issue a PLN for unpaid NICs?

The NIC PLN provisions are particularly relevant where a company has failed to pay NICs that were due.

Under section 121C of the Social Security Administration Act 1992, HMRC can seek to recover unpaid contributions from an officer where:

• the company has failed to pay contributions due within the prescribed time; and
• HMRC considers that the failure was attributable to the fraud or neglect of one or more officers.

HMRC’s burden is to establish the relevant facts on the balance of probabilities.

HMRC’s guidance makes clear that a PLN is not intended simply to penalise directors of businesses that have genuinely failed.

Before issuing a notice, HMRC is expected to investigate the reasons for the company’s failure to pay. This can include reviewing the company’s books and records, examining financial transactions, considering the officer’s responsibilities and involvement in payroll and financial matters, and considering representations made by the individuals concerned.

HMRC also states that it should take account of directors who have taken reasonable steps to prevent or minimise the company’s PAYE and NIC liabilities.

Can a PLN relate to VAT or other taxes?

Yes, but the distinction between the underlying tax liability and the penalty is important.

A PLN is not a general mechanism that allows HMRC to transfer any unpaid company tax to a director.

However, separate legislation can make a company officer personally liable for certain penalties arising from deliberate non-compliance.

For example, HMRC’s guidance provides that an officer may become personally liable for all or part of a penalty where:

1. the company is liable to a penalty for a deliberate inaccuracy in a return or other document;
2. the deliberate inaccuracy is attributable to an officer; and
3. the officer has gained or attempted to gain personally from the inaccuracy, or the company is insolvent or likely to become insolvent.

Similar company-officer provisions apply to certain VAT and excise wrongdoing penalties. HMRC’s guidance confirms that a liable officer can appeal against the decision to pursue them for all or part of the penalty and the amount allocated to them.

This means that businesses and their officers should distinguish carefully between:

• the company’s underlying tax liability;
• a penalty imposed on the company; and
• a PLN transferring liability for all or part of that penalty to an individual.

Who can receive a Personal Liability Notice?

A PLN is not necessarily restricted to someone who is formally registered at Companies House as a director.

The relevant legislation and HMRC guidance use the concept of a company “officer”. Depending on the particular PLN regime, this can include individuals other than formally appointed directors.

HMRC’s assessment is therefore concerned with the individual’s actual role and involvement, rather than simply their job title.

For NIC PLNs, HMRC’s investigation can include consideration of the individual’s knowledge, role, responsibilities and functions, particularly in relation to payroll and financial matters.

This means that anyone involved in the financial management or decision-making of a company should take care when responding to an HMRC enquiry that could potentially result in a PLN.

What is ‘phoenixism’ and why is it relevant?

HMRC also considers the circumstances surrounding the failure of a company and whether there has been what is commonly referred to as “phoenixism”.

This can arise where a company becomes insolvent or is liquidated with unpaid tax liabilities, while substantially the same business or assets are transferred to another company involving the same or connected individuals.

Phoenixism does not, by itself, mean that a director is automatically personally liable for the company’s tax debts. However, it can be relevant to HMRC’s assessment of culpability, insolvency and the circumstances in which a PLN may be appropriate.

HMRC’s NIC guidance specifically includes phoenixism within its PLN guidance and states that evidence of phoenixism may be relevant when considering whether a company may become insolvent.

Why are Personal Liability Notices an increasing concern?

The potential consequences of a PLN can be significant because it can move a liability from the corporate sphere into the individual’s personal finances.

There is also a broader focus on deliberate tax non-compliance and the penalties associated with it.

For example, HMRC’s current guidance allows certain company officers to be pursued personally for penalties arising from deliberate inaccuracies where the statutory conditions are satisfied.

This makes it particularly important for company officers to ensure that the facts and circumstances surrounding an HMRC investigation are properly understood and presented.

A failure to distinguish between deliberate behaviour, negligence, reasonable error and genuine commercial failure can have significant consequences where HMRC is considering whether the statutory conditions for personal liability are satisfied.

Could HMRC publish details of a PLN?

On 13 July 2026, HMRC published proposals to reform the Publishing Details of Deliberate Defaulters regime.

The proposed changes would allow HMRC to publish details of company officers who have received PLNs in connection with company penalties arising from deliberate non-compliance. The proposals would also allow HMRC to publish more information about the underlying deliberate non-compliance.

The proposals are not intended to apply to every PLN. The proposed changes relate to PLNs issued where a company’s liability to a penalty for deliberate non-compliance is transferred to a company officer. The changes are intended to apply to qualifying deliberate non-compliance taking place after the relevant Finance Bill receives Royal Assent.

If implemented, these changes could increase the potential consequences of deliberate tax non-compliance for company officers, extending beyond the financial liability itself.

Can a Personal Liability Notice be challenged?

A PLN is not automatically conclusive simply because HMRC has issued it. The appropriate grounds and procedure will depend on the statutory regime under which the notice has been issued.

For a NIC PLN, relevant questions may include:

• Were the NICs actually due and unpaid?
• Was the individual an officer at the relevant time?
• Did the failure to pay arise from the individual’s fraud or neglect?
• What was the individual’s actual role and responsibility?
• Did the individual take reasonable steps to prevent or minimise the company’s liabilities?
• Has HMRC correctly identified and quantified the unpaid contributions?
• Has any liability been apportioned correctly between different officers?

HMRC’s guidance confirms that, where there is more than one potentially culpable officer, it will consider each individual’s degree of culpability when determining how the unpaid contributions should be apportioned.

For company-officer penalty PLNs, the individual can appeal against HMRC’s decision to pursue them for all or part of the company penalty, including whether the penalty is attributable to them and the amount allocated to them.

The time limits and appeal process depend on the type of PLN involved. A notice should therefore be reviewed promptly and professional advice obtained where appropriate.

Does liquidation protect a director from a PLN?

The liquidation of a company does not necessarily prevent HMRC from pursuing a company officer personally.

Insolvency can be one of the circumstances relevant to HMRC’s ability to transfer certain penalties to an officer. For example, HMRC’s company-officer penalty guidance identifies insolvency or likely insolvency as one of the conditions that can apply to deliberate inaccuracy penalties.

Similarly, HMRC’s guidance on VAT and excise wrongdoing states that where a company may soon become insolvent, or has become insolvent but has not yet been struck off or dissolved, a PLN may need to be issued to liable officers as a matter of urgency.

Directors should therefore not assume that liquidation or dissolution will automatically remove their potential personal exposure.

What should you do if you receive a PLN?

A PLN should be treated as a serious matter and reviewed without delay.

The first step is to identify exactly which statutory provision HMRC is relying on and what liability is being transferred to the individual.

It is then important to establish:

• what HMRC says happened;
• which actions or omissions HMRC attributes to the individual;
• whether HMRC alleges fraud, neglect or deliberate conduct;
• what evidence HMRC has relied upon;
• whether the statutory conditions for personal liability have been met;
• whether the amount included in the notice has been calculated correctly; and
• what appeal or review rights are available.

HMRC’s own guidance indicates that the circumstances and evidence surrounding a company’s failure should be investigated before a PLN is issued.

Where there is a genuine dispute about the facts or HMRC’s interpretation of the legislation, obtaining specialist tax advice at an early stage can help ensure that the relevant evidence and arguments are properly presented.

How can we help?

A Personal Liability Notice can expose a company officer to significant personal financial consequences.

The rules are highly fact-specific and depend on the statutory regime under which HMRC has issued the notice. We can assist with reviewing the notice, assessing the underlying facts and evidence, considering whether the statutory conditions have been satisfied and advising on the available appeal or dispute process.

If you have received a Personal Liability Notice, or HMRC has indicated that it is considering issuing one, early advice can be important in protecting your position.