COMPANY OFFICERS JOINTLY AND SEVERALLY LIABLE FOR VAT PENALTY

The decision in a recent tax tribunal case reminds us that directors and other company officers may be personally liable for VAT penalties of their company. The recent case involved a penalty for late registration for VAT where the threshold had been exceeded.

Three conditions must be satisfied before the liability for a penalty payable by the company can be imposed on an individual:
 

1. A penalty must be payable by the company for a deliberate failure.
    
2. The individual on whom HMRC seek to impose liability must be an “officer” of the company
    
3. The deliberate failure must be attributable to that officer.