HMRC Notice Of Requirement For Security

Overview Of HMRC Notice Of Requirement For Security

An HMRC Notice of Requirement for security can be used when HMRC is concerned about PAYE, National Insurance Contributions and VAT in jeopardy or it thinks you will not pay the tax on time.

It is applied to those taxes when a taxpayer is collecting tax for HMRC but when there are concerns it will not be handed over.

HMRC has the power to issue a Notice of Requirement for security (also referred to as a NOR) from the following legislation:

• PAYE – The Income Tax (Pay As You Earn) (Amendment) Regulations 2012 inserted Part 4A of the Income Tax (Pay As You Earn) Regulations 2003
• National Insurance – Part 3B The Social Security (Contributions) Regulations 2001
• VAT – Paragraph 4(2) of Schedule 11 of the Value Added Tax Act 1994

It is critical that a Notice of Requirement is not overlooked and addressed immediately. Failure to comply is a criminal offence and you could receive a fine up to £5,000.

Requirement For Security From Employers

HMRC when it considers it necessary may require the following persons of an employer to provide security:

• Director
• Company Secretary
• Company Officers, including those purporting to act 

Contents Of The Notice Of Requirement For Security

The Notice of Requirement must confirm the following information:

• Value of security to be provided.
• Manner in which such security is to be provided.
• Date by which the security is to be provided.
• Period of time for which the security is required to be given to HMRC.

The Notice of Requirement must contain an explanation of:

• The employer’s right to make a request to defer the provision of security under paragraph 10(1) of Schedule 56 of the Finance Act 2009.
• That if a request to defer under paragraph 10(1) of Schedule 56 is made before the date the security required falls due then the requirement to provide the security does not apply.
• That if HMRC does not agree to the requested deferral then the security is to be given on or before the 30th day after the day on which such notice is served by HMRC on the employer.

Application To Reduce The Value Of Security To Be Provided

If an employer (or a person of any employer) has provided security, they can apply to HMRC to reduce the value held by HMRC if:

• There is a case of hardship.
• The person is no longer a person of the employer from whom security can be demanded.
• Since the security was provided due to a reduction in employees the employer has ceased to be an employer.

Appealing A Notice Of Requirement For Security

A person who received a Notice of Requirement can appeal any of its requirements.

A person who has provided security can appeal: 

• The rejection of a request to reduce the level of security sought.
• The level of reduction to the security.

In order to appeal the Notice of Requirement this application must:

• Be made within 30 days.
• State the basis of the appeal grounds.