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.
Frequently asked questions
Who has the burden of proof in a Personal Liability Notice appeal?
HMRC does. As Judge Kevin Poole stated in October 2022, the burden lies on HMRC to prove its case on a balance of probabilities. HMRC must demonstrate, with sufficient evidence, that the conditions for issuing a Personal Liability Notice are met, and where it cannot discharge this burden the PLN must be overturned.
Does a director have to give evidence in a PLN appeal?
Not necessarily. In one case involving an executive chauffeur business facing assessments of over £300,000, CTM took the strategic decision not to present the director's oral evidence and placed the burden on HMRC to prove its case. The Tribunal ruled that HMRC had produced insufficient evidence and allowed the appeal.
Can HMRC visit notes be challenged at Tribunal?
Yes. In a case involving a Romanian builder facing £250,000 of VAT and CIS assessments, HMRC relied on visit notes it claimed recorded confessions made during compliance visits. CTM challenged whether the notes were a true and complete record, and the Tribunal allowed the appeal because HMRC's evidence did not discharge its burden of proof.
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