Which Department Issues an HMRC Security Bond?
The Specialist Investigations Securities Team (based in Bootle) are in charge of deciding when to require a company or individual to give security for tax at risk of being unpaid. They will demand security for tax or NICs that is already due, or which they have determined is at risk of not being unpaid in the future.
The security is formally demanded in a document called a Notice of Requirement (NoR). The NoR covers how much security is being demanded, the date by which it needs to be paid and the different ways in which you can pay it.
The Securities Team do not take the decision to demand security lightly, so being issued a demand for security is a very serious matter. There are also very serious consequences if you fail to give the security demanded, including criminal sanctions and high fines.
Once you have given the security to HMRC, they can use it to set off future or past non-payments of the relevant tax as required.
Which Taxes can the Securities Team Require a Security Bond for?
Security can only be required by HMRC in relation to the following taxes:
- PAYE deductions
- Class 1 National Insurance Contributions
- Landfill Tax
- Aggregates Levy
- Climate Change Levy
- Insurance Premium Tax
- Machine Games Duty
- General Betting Duty
- Pool Betting Duty
- Remote Gaming Duty
- Air Passenger Duty
What will the Securities Team Consider When Issuing a Demand for Security?
The Securities Team will carry out a risk assessment to determine if there is a chance that tax revenues in relation to one of the taxes in the above list may not be paid. When they will consider a number of different factors when carrying out the risk assessment, such as Security is normally only demanded the highest risk cases.
If a company or individual has entered into (and kept to the terms of) a Time to Pay Arrangement, the Securities Team will not seek to issue a demand for security.
They will consider who is responsible for the non-payment or potential non-payment of the tax. For security relating to PAYE and NICs, the Securities Team can ask more than one person to give security jointly and severally where they think that the non-payment is the fault of more than one person or entity.
Do the Securities Team Give Notice Before Issuing a Notice of Requirement?
A demand for security from the Securities Team will not normally come out of the blue – it’s generally something that HMRC will warn the potential recipients about prior to the issue. The only exception to this is where they think that a prior warning will make the recipient less likely to pay the tax or security as it will effectively have put them “on notice”.
If HMRC is threatening to issue you or your company with a Notice of Requirement requiring you to pay security for potential or past unpaid taxes, we can help. Being issued with a Notice of Requirement is very serious. Call us on 08000 746 757 for a free, no obligation discussion, or use the live chat function on your screen.