Under Section 121C of the Social Security Administration Act 1992, HMRC can issue a Personal Liability Notice to a director for a company’s National Insurance debts, when

• The company has failed to pay over the NI contributions and
• The failure appears to be attributable to the fraud or neglect on behalf of the officers of the company.

A recent decision at the First Tier Tribunal in Jenkins-Yates (2026) has found in favour of HMRC. Between November 2020 and August 20211, Mr Jenkins-Yates’ company, Houst Holdings Limited (“HH”), incurred NI liabilities of £95,000. During this period, HH made substantial payments to its parent company but did not make any payments to HMRC.

In December 2022, HH entered into liquidation.

In March 2024, HMRC issued a PLN to the director for approximately £60,000 arguing that the NI debts had accrued due to the director’s neglect. The director appealed arguing that he delegated his finance responsibilities to others.

The tribunal found in HMRC’s favour arguing that;

• the director could not delegate his responsibilities.
• the HMRC debt had accrued over a period of time
• the RTI monthly submissions were an acknowledgement of the accruing debt
• funds were used for other purposes including making paying to other group companies.

This case highlights one of the many risks faced by directors if they continue to trade and incur liabilities to HMRC which remain unpaid. This reinforces the need for all professional advisors to advise directors on their potential personal liability when their company faces financial challenges.