SCHEDULES
SCHEDULE 13Joint and several liability of company directors etc
Tax avoidance and tax evasion cases
2
1
An authorised HMRC officer may give a notice under this sub-paragraph to an individual if it appears to the officer that conditions A to E are met.
2
Condition A is that a company has—
a
entered into tax-avoidance arrangements, or
b
engaged in tax-evasive conduct.
3
Condition B is that—
a
the company is subject to an insolvency procedure, or
b
there is a serious possibility of the company becoming subject to an insolvency procedure.
4
Condition C is that—
a
the individual—
i
was responsible (whether alone or with others) for the company entering into the tax-avoidance arrangements or engaging in the tax-evasive conduct, or
ii
received a benefit which, to the individual's knowledge, arose (wholly or partly) from those arrangements or that conduct,
at a time when the individual was a director or shadow director of the company or a participator in it, or
b
the individual took part in, assisted with or facilitated the tax-avoidance arrangements or the tax-evasive conduct at a time when the individual—
i
was a director or shadow director of the company, or
ii
was concerned, whether directly or indirectly, or was taking part, in the management of the company.
5
For the purposes of sub-paragraph (4)(a)(ii)—
a
an individual is treated as knowing anything that the individual could reasonably be expected to know;
b
an individual is treated as receiving anything that is received by a person with whom the individual is connected (within the meaning given by section 993 of ITA 2007).
6
Condition D is that there is, or is likely to be, a tax liability referable to the tax-avoidance arrangements or to the tax-evasive conduct (“the relevant tax liability”).
7
Condition E is that there is a serious possibility that some or all of the relevant tax liability will not be paid.
8
A notice under sub-paragraph (1) must—
a
specify the company to which the notice relates;
b
set out the reasons for which it appears to the officer that conditions A to E are met;
c
state the effect of the notice;
d
offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);
e
explain the effect of paragraph 13 (right of appeal).
9
It must also—
a
specify the amount of the relevant tax liability, if the existence and amount of that liability have been established;
b
if not, indicate that the amount will be specified in a further notice.
10
Once the existence and amount of the relevant tax liability have been established in a case to which sub-paragraph (9)(b) applies, an authorised HMRC officer must give a further notice specifying that amount.
11
A notice under sub-paragraph (10) must—
a
be given to the individual to whom the notice under sub-paragraph (1) was given;
b
offer the individual a review of the decision to give the notice, and explain the effect of paragraph 11 (right of review);
c
explain the effect of paragraph 13 (right of appeal).
12
An individual who is given a notice under sub-paragraph (1) is jointly and severally liable with the company (and with any other individual who is given such a notice) for the relevant tax liability.
This is subject to paragraph 9 (interaction with penalties).
13
The amount of the individual's liability under sub-paragraph (12) is taken to be the amount specified under sub-paragraph (9)(a) or (10). For provision under which the amount so specified may be varied, see—
a
paragraph 10 (modification etc),
b
paragraphs 11 and 12 (review), and
c
paragraphs 13 and 14 (appeal).