If you receive a notice of requirement for a security bond to be paid, it’s likely you’ll want to do everything you can to avoid making the payment. In this case, there are a number of options you can explore; however, it is certainly not something you can simply ignore. Do so and you could face criminal prosecution and a maximum fine of £5,000.
So what are your options? You can:
- Ask for other evidence, not known by HMRC, to be taken into consideration;
- Ask for a review by someone other than the issuing HMRC officer;
- Appeal to an independent tribunal;
- Or, if you really can’t pay, you can voluntarily wind up the company.
You disagree with the decision
The notice of requirement will explain how the decision was reached and how you can appeal. If you disagree with the decision, you must notify HMRC within 30 days of the notice being received. You can ask your accountant or tax adviser to appeal the decision on your behalf.
If you have new information you think might change the decision HMRC has made, you should inform HMRC immediately. You will then be told if the information you have provided changes the decision and why.
You want the decision reviewed
If you can’t reach an agreement with HMRC following your initial discussions, you can have the case reviewed by an officer other than the original officer who made the decision. You will have 30 days to tell HMRC you want a review, and this will be completed within 45 days.
At this point, you’ll also have the chance to provide further additional information about your case. Once the review is complete, HMRC will write to you to inform you of the outcome and explain its reasons. If you disagree with the review, you can still appeal to the independent tax tribunal.
You want to wind the company up
If you cannot afford to pay the security bond, have not agreed more time to pay with HMRC, and cannot access finance elsewhere, you may choose to voluntarily wind up your company through a creditors’ voluntary liquidation. The repercussions of this process are serious and far-reaching, so you should discuss your options with an insolvency expert before you make a decision.
Author: Mike Smith