If you are currently in arrears with your PAYE, VAT, Corporation Tax or CIS payments, or are the director of a company recently liquidated with tax liabilities and now have a new company, there’s a good chance you’ll be contacted by the HMRC Securities Team.
If you are, you’ll receive a letter headed – Fraud Investigation Service – Securities Team – which in itself will be enough to terrify most corporate taxpayers. However, while it might sound like you’re going to be subject to a tax fraud investigation, in many cases, it’ll be a letter warning of the possible requirement, or the requirement, for you to pay a security.
What is a tax security?
HMRC Securities Team will ask you to pay a deposit or security if it believes there’s a serious risk you will not pay your future tax liabilities on time. Tax securities are rare and only used against serious offenders and not those who are having genuine payment difficulties and have made every effort to pay their tax on time. If HMRC thinks a security is necessary it will calculate the amount based on each individual case, but it can be tens of thousands of pounds.
A serious situation
Letters from the HMRC Securities Team will be sent to the limited company it relates to and the director’s home address. If you receive a letter from the HMRC Securities Team, it is a very serious situation as it is a criminal offence not to comply with the requirement. If the director ignores the requirement and continues to trade, they can also be made personally liable for the sum.
If you receive a notice of requirement to pay a security from HMRC’s Securities Team, or a letter warning that a security may have to be paid, it’s essential you act early and deal with the notice by the deadline. It is possible to negotiate with HMRC and for requests for security to be withdrawn, but you will need to seek expert advice immediately. Burying your head in the sand is the worst thing you can do.