DMBM537450 - Debt and return pursuit: Climate Change Levy: Who is liable to pay the debt? Company directors, managing officers, etc.

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Normally, directors and managing officers of limited companies are not personally liable for company debts. However, we may transfer, in whole or in part, a civil penalty for fraudulent evasion of CCL, from a company to a director or managing officer of a company if there is evidence to show that the conduct giving rise to the penalty is attributable to the dishonesty of the director or managing officer. The CCL itself cannot be transferred.

Paragraph 99 (3) of Schedule 6 to the Finance Act 2000 provides:

“Where a notice is served under this paragraph, the portion of the basic penalty specified in the notice shall be recoverable from the named officer as if he were personally liable under paragraph 98 to a penalty which corresponds to that portion.”

Paragraph 99 (8) of Schedule 6 to the Act defines managing officer as any manager, secretary or other similar officer of the company or any person claiming to be a manager, secretary, etc or a director.

In the circumstances, we will allocate a non-VAT registration number to the company director or managing officer unless the debtor is registered as a sole proprietor.

If we impose a penalty we must enforce it even if there is little prospect of payment. If we do not enforce these penalties dishonest company directors and officers may liquidate a company on which a penalty is imposed and simply move on to form new companies.