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HMRC internal manual

Securities Guidance

From
HM Revenue & Customs
Updated
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Requirement to give security: PAYE/NICs: requiring security from more than one person

We can require more than one person to give security in respect of the employer.

The persons required to give security will be jointly and severally liable, see SG26500.

Each person is given a separate Notice of Requirement (NOR), and each NOR should include the names of the other persons who have been given an NOR. The covering letter sent with the NOR explains how we require an amount of security to be given by one or more of the persons listed in the NOR. The persons listed should make arrangements to give us the total amount of security. If they do not do this each person to whom an NOR has been given can be prosecuted, and each person can be liable on conviction to a fine of up to £5,000.

Example

The employer is a company owned by two sisters, Hazel and Diane, who are also directors of the company. They have been involved in a number of business failures where PAYE has been left unpaid.

You require security of £45,000 from the employer (the company) and you decide that you want Hazel and Diane, as directors who control the company’s money, to give security in respect of the employer.

You give the company, as the employer, an NOR requesting security of £45,000 to be given jointly and severally with Diane and Hazel.

You also give Hazel an NOR specifying that you want her, in her capacity as a director, to give security of £45,000 and that she is jointly and severally liable with the company and with Diane.

At the same time, you give Diane an NOR specifying that you want her, in her capacity as a director, to give security of £45,000 and that she is jointly and severally liable with the company and with Hazel.

The covering letters to the company, Hazel and Diane explain that they should make arrangements to pay the £45,000 security in total.

Before you give the NORs you set up a PAYE Security Deposit (PSD) charge on SAFE using the employer’s name and reference. Don’t overlook the likelihood that Hazel and Diane’s old companies also left unpaid VAT and that a VAT security should also be considered, but you cannot ask Hazel and Diane to give security for the new company as a VAT-registered trader.

If you do not get the £45,000 security, Hazel, Diane and the company can each be prosecuted and each can be liable on conviction to a fine of up to £5,000.

SI2003/2682/REG97P(2)(b)
SI2003/2682/REG97Q(3)