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HMRC internal manual

Labour Provider Guidance

From
HM Revenue & Customs
Updated
, see all updates

Stakeholders: Specialist Investigation Teams: security

A security is an amount of money that HMRC requires any business to pay because we believe it may not pay its VAT, environmental taxes or PAYE/NICs.

HMRC will seek security only where there is serious risk to the revenue, and will do so reasonably and proportionately. Security will only be required from the minority of businesses and employers who do not pay, or are at risk of not paying their VAT, environmental taxes or PAYE/NICs.

High risk businesses and employers may be involved in

  • phoenixism - repeated insolvency and new company creation
  • repeated refusal to pay until HMRC is about to start bankruptcy or liquidation proceedings
  • suspected tax fraud.

Any person required to give security must be served with a Notice of Requirement (NOR) to give security.

Security is usually a deposit held by HMRC or paid into a joint HMRC/customer interest bearing bank account. Security can also be a performance bond provided by an approved financial institution.

We require security as a condition of continuing to make taxable supplies. Businesses and/or company officers that do not give security and who continue to make taxable supplies can be prosecuted.

More information is available on the Securities Guidance

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)