HMRC’s power to make company directors personally liable for their company’s unpaid tax debts — without limit, without apportionment, and regardless of whether insolvency proceedings have concluded — is one of the most aggressive enforcement tools in its arsenal. The Joint and Several Liability Notice (JSLN), introduced under Schedule 13 of the Finance Act 2020, can pursue your home, savings, and personal assets for a company debt running into millions. Until now, the procedural protections available to individuals facing these notices were poorly defined. A First-tier Tribunal decision published in early 2026 has changed that significantly.
James Hall v HMRC [2026] UKFTT 124 (TC) is not a case about whether HMRC was right to issue a JSLN. It is a case about the legal framework within which JSLNs are contested — and the Tribunal’s findings give directors and their advisers considerably more to work with than HMRC would like.
The Facts: Three Insolvent Companies, £1.687 Million, One Notice
James Hall was a director of three companies that entered insolvency proceedings with combined outstanding tax liabilities of £1,687,010.04. HMRC issued a JSLN on 2 April 2024 under paragraph 3 of Schedule 13 — the “repeated insolvency” gateway, colloquially known as the anti-phoenixism provision. The theory is straightforward: if you have presided over a pattern of companies folding with unpaid HMRC debts, you are personally on the hook for the next one’s liabilities.
Mr Hall appealed on five grounds, three of which — proportionality, irrationality, and HMRC’s failure to follow its own guidance — are public law arguments. HMRC applied to strike those three grounds out, arguing the First-tier Tribunal has no jurisdiction to entertain them. The Tribunal rejected that application entirely.
The Core Finding: A JSLN Is a Criminal Charge Under Article 6 ECHR
The Tribunal’s most significant holding is that a JSLN constitutes a “criminal charge” for the purposes of Article 6 of the European Convention on Human Rights. This is not a trivial classification. The criminal limb of Article 6 carries a substantially more demanding set of procedural guarantees than the civil limb.
The consequence that matters most in practice: the burden of proof sits with HMRC. The Tribunal directed that HMRC must serve its witness evidence and skeleton argument first — it goes first, not the appellant. HMRC must establish a prima facie case that each of the statutory conditions for issuing the notice was satisfied. The director does not begin in the dock; HMRC must put the case before the director is required to answer it.
For a regime where notices routinely cover seven-figure sums and enforcement can extend to bankruptcy proceedings, this is a material shift in the landscape.
Public Law Arguments Now Available at the First-tier Tribunal
The secondary finding is equally important. The Tribunal confirmed it has jurisdiction to hear public law grounds of challenge — including proportionality (under Article 1 Protocol 1 ECHR), Wednesbury irrationality, and HMRC’s failure to follow its published guidance — in JSLN appeals. HMRC argued these were judicial review arguments for the Administrative Court, not matters for the Tax Tribunal. The Tribunal disagreed.
This matters because the First-tier Tribunal is faster, cheaper, and more accessible than judicial review. If a director can argue proportionality and irrationality in the same proceedings where they contest the underlying liability, the scope for challenge broadens dramatically. Previously, running a public law argument required parallel proceedings. Now, at least at first instance, it appears they can be run together.
This decision is not binding precedent — it is a First-tier Tribunal ruling and HMRC may well appeal — but it represents the current state of play and will influence how notices are contested until a higher court rules otherwise.
Understanding the Three JSLN Gateways Under Schedule 13
HMRC’s guidance on JSLNs identifies three routes through which a notice can be issued:
- Tax avoidance or evasion (paragraph 2, Schedule 13): the company entered into avoidance arrangements or engaged in evasive conduct, the company is insolvent or at serious risk of insolvency, and the individual had a sufficient connection to those arrangements — including simply receiving a financial benefit from them.
- Repeated insolvency (paragraph 3, Schedule 13): the individual had a relevant connection (as director, shadow director, or participator) to at least two insolvent companies within five years, each carrying unpaid tax exceeding £10,000, and now has a connection to a further company with its own outstanding tax position. This was the gateway used in James Hall. HMRC has a two-year limitation period from when it first had sufficient facts to act — a point worth checking rigorously in every case.
- Facilitating others’ avoidance or evasion (paragraph 5, Schedule 13): the company incurred penalties for facilitating third-party avoidance or evasion, and the individual was connected to it.
The breadth of the “connection” test under all three gateways is deliberately wide. A non-executive director who approved accounts that included benefits from a later-challenged scheme, or who received remuneration structured through an avoidance arrangement, may be in scope. The legislation deems an individual to know anything they could reasonably be expected to know.
The 30-Day Deadline and What It Means in Practice
Every JSLN must by statute include an offer of an HMRC internal review and information about the right of appeal. The window is 30 days. Miss it, and the notice is enforceable in the same way as any personal debt — county court judgment, charging order over property, bankruptcy petition. Once that window closes without a successful challenge, your exposure is fixed.
HMRC has historically relied on the tight timeline to limit the scope of challenge. The James Hall decision does not extend that deadline, but it does mean the grounds available within it are considerably richer than previously assumed.
CFO Action Points
- If you receive a JSLN, treat day one as the clock starting. The 30-day window is strict. Instruct specialist tax dispute counsel immediately — not after the internal review is completed, not after a few weeks of internal deliberation.
- Check the two-year limitation period. Under the repeated insolvency gateway, HMRC must act within two years of first having sufficient facts. If HMRC has sat on relevant information beyond that window, the notice may be invalid regardless of whether the underlying conduct is proven. This is a procedural argument that requires forensic analysis of HMRC’s correspondence timeline.
- Run all available grounds. James Hall confirms you can argue proportionality, irrationality, and guidance failures alongside the substantive tax grounds — all in the same Tribunal proceedings. Do not voluntarily narrow your appeal.
- HMRC goes first. As a result of this decision, HMRC must serve its witness evidence before you respond. Use that evidence to probe the quality and completeness of its case before committing your own position.
- Review your group structure and insolvency history. If you are currently a director of companies with outstanding HMRC liabilities and have previously been connected to insolvent entities, the repeated insolvency gateway may already be in scope. Early advice on whether the conditions are met — and how to respond if a notice arrives — is far cheaper than contesting a seven-figure JSLN after the fact.
- Non-executive directors are not safe. The connection test catches individuals who received financial benefits from relevant arrangements, not just those who designed or implemented them. NEDs on boards of groups with complex remuneration or tax structures should be aware of their potential exposure.
- Document everything contemporaneously. HMRC’s standard of proof is now, per this decision, higher than it was assumed to be. Detailed contemporaneous board minutes, decisions on tax structures, and evidence of professional advice received all become weapons in a well-constructed appeal.
The Broader Pattern: HMRC Pushing the Boundaries of Personal Liability
James Hall sits alongside a pattern of cases where HMRC is aggressively expanding personal liability for corporate tax failures. The RPC Tax Bites June 2026 roundup captures this well. The JSLN regime is relatively young — Schedule 13 only came into force in 2020 — and the case law is still developing. That cuts both ways: HMRC is still testing the outer limits of its power, and so are appellants. James Hall is one data point in what will be years of litigation defining how these notices work in practice.
For any CFO advising a board, or any director of a group where insolvency risk is present, the message is straightforward: HMRC can and will pierce the corporate veil. The protections established in James Hall are real but procedural — they do not change the underlying power, only how it is exercised and challenged. The earlier you engage with specialist advice, the more of those protections you can actually use.
A comprehensive overview of the Schedule 13 regime and challenge strategies is available from Tax Disputes.