Registration: Demanding security
The power to demand security is contained in Finance Act 1994 Chapter IV paragraph 36 which states:
The Commissioners may require any operator of an aircraft which is or is liable to be registered or any fiscal representative, to provide such security, or further security, as they may think appropriate for payment of any duty which is or may become due from the operator.
The overriding factor in any decision on whether to pursue security action must always be the potential revenue loss. We must ensure that all matters are taken into account when making any decision and that the decision is therefore reasonable.
Ideally security action is taken in the early stages of registration although a case can be strengthened if a few periods have elapsed and compliance proves to be poor, thus demonstrating that the revenue is at risk. If the security is taken the CAT should monitor the case to confirm that it is appropriate for the department to hold such security indefinitely.
Possible security cases
Any possible security cases should be referred to the CAT for consideration before any action is taken.