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HMRC internal manual

Securities Guidance

The security: performance bond offered in exchange for security deposit

A person who has given a security in the form of a deposit can ask for the deposit to be repaid in exchange for providing a performance bond.

It is acceptable to do this as long the financial institution has an office in the UK and is on the list of approved guarantors, see SG53300.

When the performance bond is in place you can repay the security deposit, see SG62000.

Once the security deposit is exchanged for a bond in VAT/environmental tax cases you must lift the manual Default Surcharge inhibit so that the person will become once more liable to surcharge.