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For accounting periods ending on or after 22 July 2020 certain individuals can be jointly and severally liable for debts of 'bodies corporate or unincorporate' which are owed to HMRC in circumstances where the bodies corporate or unincorporate are insolvent or potentially insolvent¹. The aim of the legislation is to deter individuals from using insolvency as a way of getting out of paying their tax liability.

Joint and several liability allows the creditor, in this case HMRC, to recover liabilities owed against any of those that are jointly and severally liable without having to join the others. In this case, once an individual has been made jointly and severally liable, HMRC can recover the whole of the amount of the debt against that individual, taking debt recovery action if necessary. The person against whom recovery is made then has a right of recovery against the other parties that were jointly and severally liable. Where a director is made jointly and severally liable with the company,