Personal Liability Notice

Personal Liability Notice

CTM is the most successful firm in overturning Personal Liability Notice (PLN) decisions at the Tax Tribunal. The following two cases illustrate the firm’s approach and the importance of effective representation.

Case 1: Executive Chauffeur Business

The director of an executive chauffeur business faced assessments of over £300,000 for undeclared income and VAT. HMRC alleged that the business had significantly under-declared its turnover.

CTM took the strategic decision to decline to present the director’s oral evidence at the Tribunal hearing. Instead, CTM placed the burden squarely on HMRC to prove its case. HMRC bore the burden of proof in establishing that the assessments were correct.

The Tribunal ruled that HMRC had produced insufficient evidence to support its assessments and the appeal was allowed.

Case 2: Romanian Builder

A Romanian builder faced assessments totalling £250,000 in respect of VAT and CIS inaccuracies. HMRC relied heavily on visit notes which they claimed contained confessions made by the taxpayer during compliance visits.

CTM challenged the accuracy and reliability of these visit notes. The representation raised serious questions about whether the notes were a true and complete record of what had been said during the visits.

The Tribunal allowed the appeal, finding that HMRC’s evidence was not sufficient to discharge its burden of proof.

The Legal Principle

As Judge Kevin Poole stated in October 2022:

“The burden lies on HMRC to prove, on a balance of probabilities.”

This fundamental principle is at the heart of every PLN appeal. HMRC must demonstrate, with sufficient evidence, that the conditions for issuing a Personal Liability Notice are met. Where HMRC cannot discharge this burden, the PLN must be overturned.

CTM’s experience in PLN cases ensures that HMRC is held to the required standard of proof and that directors’ rights are properly protected.