UKFTT 56 (2010) Livingstone v HMRC
Company NICs due by director - HMRC won
Case Summary:
Mr Livingstone appealed a Personal Liability Notice (’PLN) issued by HMRC under s121C of the Social Security Administration Act 1992. The PLN was for unpaid Class 1 NICs of £60,428.57 due from Mirekirk One Ltd. HMRC’s case was that the company had failed to remit the NIC because of Mr Livingstone’s neglect. The burden of proof was on HMRC.
On liquidation of the Company no payments of PAYE and NIC due were made although other payments were made to creditors including Mr Livingston and a company in which he was a director. Over the preceding 17 months PAYE and NIC had been deducted from staff salaries but nothing had been remitted to HMRC.
“Mr Livingstone used the PAYE Tax and NIC deductions due and payable to HMRC to fund the Company activities, in clear breach of the statutory requirement to pay these deductions to HMRC by the 19th day of each month. The Company thereby attempted to retain a veneer of solvency through the non-payment of fiduciary taxes; and it was submitted that a prudent and reasonable person would not have conduct business in such manner. The decision to continue to trade the Company during the period of the sale negotiations, and withhold all payments of PAYE Tax and NIC demonstrated a degree of negligence on Mr Livingstone’s part in making decisions which clearly and significantly increased the Company’s liabilities to HMRC.”
Mr Livingston argued he had done all in his power to keep the company going to get a good price on sale. He had not intended to deprive HMRC of its dues. But he was found negligent and personally liable for the £60K.
