Personal liability notice for unpaid National Insurance

HELEC purported to transfer its staff to another company CML under an arrangement whereby CML would pay the staff and the associated PAYE income tax and National Insurance contributions and invoice HELEC for the amount paid plus an administration fee. No PAYE or National Insurance was ever paid over to HMRC although the employees were paid. HELEC went into liquidation and on investigation HMRC concluded that no transfer of employees had ever taken place and that responsibility for payment of PAYE and National Insurance remained with HELEC.

HELEC’s accounts showed that it had 55 employees and a tax creditor of nearly £700 000. There was no evidence that this creditor was for any tax other than PAYE and National Insurance despite the arguments being put forward by the director that this might relate to other taxes.

The First-tier Tribunal concluded that the director was an unreliable witness...