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HMRC internal manual

Securities Guidance

Calculating the amount of security: the quantum calculation: including the existing debt in the quantum

The third step in the quantum calculation is to include any existing debt the person may have at the time you require security.

The debt can only be for the tax to which security relates.

Consider if security action is the right action to take when the size of the debt on file means that debt management or enforcement action might be more appropriate. For example, when a company is clearly unable to pay its debts referring the case for insolvency action may be better than continuing security action.

VAT/environmental taxes

In Luke Morris v Revenue and Customs [2006] UKVAT V19492 the VAT security quantum calculation made allowance for an existing debt that was an additional assessment. We had made notional allowance for input tax in our estimate of future liability, but had not made any such allowance in relation to the additional assessment or checked with the assessing officer to see if he had made allowance. As such, the tribunal found that we had disregarded something to which we should have given weight. The person’s appeal was upheld.

Make allowance for notional input tax in your VAT quantum calculation.


When an employer has an existing PAYE/NICs debt you can include that debt in the total amount of security you require. Existing debt can be, for example, remittances that are late, or a determination under Regulation 80.

See SG42150 about what to say to the employer when there is existing debt and you are serving a Notice of Requirement.

See SG65250 about offsetting security against existing PAYE/NICs debt.