Page 27 - PWM2025_JULY EBOOK

BETTER BUSINESS

liability arises or is expected to arise the same themes emerge time and
from tax avoidance, tax evasion, again. And he lists the most common
repeated insolvency, or a penalty for that directors encounter.
facilitating avoidance or evasion.
It’s also worth remembering that Holding on to legacy business
personal liability can apply where “a models
company begins insolvency proceed-
ings, or is expected to do so, causing First on Perring’s list is what he
any of the tax liability to be lost to terms “one of the most frequent chal-
HMRC”. lenges”: a reluctance to fully modern-
ise the business model.
Tayor’s conclusion “Many directors,” says Perring,
Mistakes, to Taylor, are more than “are still operating with structures,
possible, they’re quite probable. pricing strategies, and service offer-
While management-related mistakes ings that suited a different era: that of
can be damaging, in terms of the long runs, predictable volumes, and
legal obligations, directors would be stable margins.”
best advised to think about how they
can protect their position. But as all should have noticed by
They need to consider directors’ now, print buyers have changed their
and officers’ liability insurance; thinking. Says Perring: “They want
check if the company’s articles shorter lead times, more flexibility,
include a specific indemnity for and value-added services like data
directors; whether a bank could management and personalised print.
enforce a personal guarantee against Standing still, or incrementally
any other guarantors; and any other tweaking what worked in 2010, isn’t
protections that may be open to enough.”
them.
Ultimately, directors need good As a result, Perring warns directors
advice and should fully understand to think holistically about where they
their position before acting. create value today. He asks: “Are
your workflows agile enough to han-
Brendan Perring, general manager, dle high-mix, low-volume orders?
Vicarious or assumed liability IPIA And are you charging for the real
This one is less obvious to many in Taylor’s eyes. “In a signature block Perring well knows that the com- value you bring: creative input, cam-
involving a company, you will often see the wording ‘For and on behalf of X mercial print industry has evolved paign integration, speed to market?”
Ltd’ under the director’s signature. This phrase is used to indicate that the over the past decade, noting that
signatory does not intend to be bound personally,” he says. “from digital disruption to rising cli- He reckons that a willingness to
From his perspective, a failure to use such a phrase “may result in a direc- ent expectations, and from automa- revisit and refresh the business
tor being deemed a party to the contract and therefore personally liable for tion to sustainability, print leaders model is no longer optional.
any subsequent breaches”. have had a lot to navigate”.
The point is that a court will always look to interpret the intention of the Yet despite such changes, Perring Underinvesting in sales and mar-
contracting parties in deciding who should be held liable. This is why he says sees many directors – “often with keting
that “it is vital that a director sets out their deliberate intention to signify on deep expertise and decades of experi- For an industry that’s all about
behalf of the company rather than as an individual”. ence” – making the same strategic communication, Perring thinks that
errors that can hold their businesses print companies are often surpris-
Tax evasion back. ingly shy when it comes to selling
Taylor’s last flashpoint revolves around tax, and he notes that the Finance Now Perring isn’t suggesting that themselves. From his standpoint “it’s
Act 2020 introduced a new form of liability for directors, whereby HMRC, these mistakes aren’t borne of care- common to see talented firms with
in specific insolvency circumstances, can hold directors jointly and severally lessness, but rather, they tend to
liable for tax or tax penalties. occur because directors are “being strong capabilities relying solely on
He says: “This liability was introduced to ensure individuals are held lia- stretched too thin, relying on legacy word-of-mouth or legacy accounts,
ble for bad behaviour and for HMRC to recover the full amount of any tax thinking, or simply not having the with little focus on structured sales
liability or penalty where companies are affected by potential or actual insol- right insight at the right time”. or modern marketing”.
vency.” Having worked alongside a range In today’s world he says “that sim-
He emphasises that HMRC can issue notices in this regard only when the of commercial print firms, he’s seen ply won’t cut it”.

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