Director Penalty Notice Template for England and Wales

A Director Penalty Notice is a formal warning that HM Revenue & Customs sends to company directors when their business fails to pay certain tax obligations. It makes directors personally liable for specific company tax debts, including PAYE, National Insurance contributions, and VAT.

These notices give directors 30 days to either pay the outstanding amount, put the company into voluntary administration, or begin liquidation proceedings. If directors don't take action within this timeframe, HMRC can pursue them directly for the full debt amount, even after they've resigned from their position or the company has closed.

HMRC issues Director Penalty Notices when companies fall behind on their tax obligations, particularly PAYE, National Insurance, or VAT payments. These notices become crucial tools for recovering unpaid tax debts from company directors who have failed to meet their statutory responsibilities.

The notices prove especially valuable when dealing with phoenix companies, where directors shut down businesses with tax debts only to start new ones. They're also used when HMRC has evidence that directors are deliberately avoiding tax payments or when standard debt collection methods have failed to secure payment from the company itself.

• Lockdown Director Penalty Notices: These make directors immediately liable for unpaid tax, with no option to avoid personal liability through administration or liquidation
• Non-Lockdown Director Penalty Notices: Give directors 21 days to take corrective action before personal liability kicks in
• Summary Director Penalty Notices: Used for straightforward cases with single tax periods
• Consolidated Director Penalty Notices: Cover multiple tax periods or different types of tax obligations in one notice
• Remission Director Penalty Notices: Issued when HMRC considers reducing or cancelling penalties due to exceptional circumstances

• HMRC Officers: Prepare and issue Director Penalty Notices when companies fail to meet tax obligations
• Company Directors: Primary recipients who become personally liable for unpaid tax debts and must respond within the notice period
• Tax Advisors: Help directors understand their obligations and options when facing a penalty notice
• Insolvency Practitioners: Assist directors considering voluntary administration or liquidation as response options
• Corporate Accountants: Support companies in preventing notices by ensuring timely tax compliance and maintaining proper records

• Tax Debt Details: Compile accurate records of unpaid PAYE, National Insurance, or VAT amounts, including specific tax periods
• Director Information: Gather full legal names, addresses, and company positions of all relevant directors
• Company Records: Document the company's registration number, trading name, and registered office address
• Payment History: Collect evidence of previous payment demands and company responses
• Timeline Verification: Confirm dates when tax obligations became due and when the company defaulted
• Notice Period: Calculate and clearly state the 30-day response deadline from the notice date

• Director Details: Full legal name, current address, and role within the company
• Company Information: Company name, registration number, and registered office address
• Tax Liability: Specific amounts owed, tax types, and relevant tax periods
• Notice Period: Clear statement of the 30-day deadline and available response options
• Legal Authority: Reference to Schedule 41 of the Finance Act 2008
• Payment Options: Detailed instructions for settling the debt
• Consequences: Clear explanation of personal liability and enforcement actions

A Director Penalty Notice differs significantly from a Notice of Proposal to Strike Off in both purpose and consequences. While both documents relate to company directors' obligations, they serve distinct functions in corporate governance.

• Legal Authority: Director Penalty Notices are issued by HMRC for tax debts, while Strike Off notices come from Companies House for administrative non-compliance
• Primary Purpose: DPNs make directors personally liable for company tax debts, whereas Strike Off notices warn of company dissolution
• Response Timeline: DPNs require action within 30 days, while Strike Off notices allow 2 months for objections
• Recovery Options: DPNs offer specific paths like payment or insolvency procedures; Strike Off notices focus on either rectifying filing issues or accepting dissolution
• Personal Impact: DPNs create direct financial liability for directors, while Strike Off notices affect the company's existence but not personal assets