NATIONAL INSURANCE CONTRIBUTIONS - section 121C Social Security Administration Act 1992 personal liability notice liability of director for company's contributions fraud or neglect on the part of a director
COSTS Regulation 21(1), Special Commissioners (Jurisdiction and Procedure) Regulations 1994 Appellant withdrawing two grounds of appeal shortly before hearing Whether appellant acting wholly unreasonably in connection with hearing
THE SPECIAL COMMISSIONERS
PETER INZANI Appellant
- and -
THE COMMISSIONERS OF
HER MAJESTY'S REVENUE AND CUSTOMS Respondents
Special Commissioner: Nicholas Aleksander
Sitting in public in London on 15 February 2006
James Green, solicitor, for the Appellant
K J Singal, HM Inspector of Taxes, for the Respondents
© CROWN COPYRIGHT 2006
(a) that he did not accept that the quantum of the NICs sought accurately reflected the unpaid liability of IWM;
(b) that IWM's inability to pay the NICs was not attributable to any fraud or neglect on the part of Mr Inzani; and
(c) that the decision to issue a personal liability notice was unreasonable.
(1) This section applies to contributions which a body corporate is liable to pay, where
(a) the body corporate has failed to pay the contributions at or within the time prescribed for the purpose; and
(b) the failure appears to the Inland Revenue to be attributable to fraud or neglect on the part of one or more individuals who, at the time of the fraud or neglect, were officers of the body corporate ("culpable officers").
(2) The Inland Revenue may issue and serve on any culpable officer a notice (a "personal liability notice")
(a) specifying the amount of the contributions to which this section applies ("the specified amount");
(b) requiring the officer to pay to the Secretary of State
(i) a specified sum in respect of that amount; and
(ii) specified interest on that sum; and
(c) where that sum is given by paragraph (b) of subsection (3) below, specifying the proportion applied by the Inland Revenue for the purposes of that paragraph.
"To cheat and defraud is to act with deliberate dishonesty to the prejudice of another person's proprietary right."
"Negligence is the omission to do something which a reasonable man, guided upon those considerations which ordinarily regulate the conduct of human affairs, would do, or doing something which a prudent and reasonable man would not do. The defendants might be liable for negligence, if, unintentionally, they omitted to do that which a reasonable person would have done, or did that which a person taking reasonable precautions would not have done."
Release Date: 29 March 2006
Authorities referred to in argument but not referred to in the decision:
Wellington v Reynolds 40 TC 209
Hurley v Taylor 71 TC 268
Nunn v Gray SpC 123
Hancock v CIR SpC 213
In Re City Equitable Fire Assurance Co Ltd  All ER 485
In Re H and others  AC 563
JR Kane & Co v CIR 12 TC 303
Jones v Garnett SpC 432.