The security: using security: demanding payment of a relevant debt: relevant debt
While we still require security we can use some or all of it to satisfy any amount of a relevant debt, which is not under appeal, that is or may become due to HMRC.
The term ‘relevant debt’ means the tax for which security has been given. For example, if an employer gives security for PAYE/NICs we cannot use any part of that security to satisfy a VAT debt that existed before we required security, or which arose after they gave security, until we no longer require the PAYE/NICs security.
You cannot use a security deposit to recover VAT default surcharge or penalties until we no longer require security.
Where a person had a relevant debt when the Notice of Requirement (NOR) was issued, and still has a relevant debt after they have given security, see SG65200 for VAT/environmental tax cases and SG65250 for PAYE/NICs cases.
You should consider requesting further security to top up the amount held to its original level, see SG68000.
Once we no longer require security we can set-off some or all of a security deposit against any debt to HMRC, see SG66300 for VAT/environmental tax security deposits and SG66350 for PAYE/NICs security deposits.