Mr Wagstaff was the sole director of a company. At the date of liquidation, HMRC were owed £273,000 in respect of National Insurance (“NI”). The company had only paid £11,000 of NI in the five years prior to the liquidation.

HMRC issued a Personal Liability Notice (“PLN”) against Mr Wagstaff on the basis that the company failed pay the NI contributions and the failure to pay the contributions was as a result of Mr Wagstaff’s neglect.

The First Tier Tribunal concurred with HMRC and stated that Mr Wagstaff was personally liable for c£300k. Mr Wagstaff appealed to the Upper Tribunal on the basis that the PLN related to NI debts which were time barred as the amounts due were more than six years old.

The UT dismissed the appeal.

This case shows that directors can no longer use HMRC as an unauthorised overdraft and HMRC are looking to pursue directors personally when the have neglected their tax affairs.