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HMRC internal manual

Securities Guidance

HM Revenue & Customs
, see all updates

The security: using security: demanding payment of a relevant debt: offsetting security against existing relevant debt - VAT/environmental taxes

Where a person had a relevant debt when the Notice of Requirement (NOR) was issued you should

  • agree with the person to offset part of the security deposit against the relevant debt
  • settle the debt as soon as you receive the deposit.

If the person still has a relevant debt after they have given security, send the Debt payment request letter.

The letter gives the person 7 calendar days in which to pay the debt. You cannot recover debt which is under appeal.

BF your case for 14 days. If the relevant debt remains unpaid after 14 days you should offset as much security as you need against the debt.

Relevant debt is explained in SG65150.

Where the person has paid a security deposit you should ask the Southend Direct Receipts Team to make payment to the person’s tax account, for example to their account on the VAT Mainframe. Advise the Team of

  • the person’s name
  • their registration number
  • the Miscellaneous Cash Deposit (MCD) number.

Write to the person, using letter Off set security, to advise them of the action that has been taken.

After 14 days check VISION to make sure the offset has taken place.

If you require the person to give further security to top up the amount held, see SG68000.

You should lift the Default Surcharge inhibit, using Form VAT719, if all of the security deposit is used.

If the person has deregistered for VAT/environmental taxes take no action until the final liability (period 99/99) is on file.

Continue to monitor the person’s compliance until security is no longer required.

Where the person has given a performance bond, see SG67100. Where the deposit is held in a joint account with us, see SG67500.