Security for PAYE on the way

New provisions will allow HMRC to demand an upfront security payment from employers it thinks run a serious risk of non-payment; failure to come up with the security will be a criminal offence carrying a £5,000 fine. The cash security payment will be held by HMRC or paid into a joint HMRC/taxpayer interest bearing bank account, or be in some form of third party guarantee provided by a bank where withdrawals can only be made if HMRC allows.

There is already a similar facility in place for VAT compliance, so it should not come as a surprise that it is to be extended to other taxes. The Budget notes state that once the regulations are in place for PAYE then this procedure will be extended to include NIC.

Paragraph 2.5 of the Tax Legislation and Rates Overview confirmed that draft Finance Bill clauses published in December 2010 will be brought forward without any changes.

Continued...

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Comments
ksagroup's picture

This comes as no surprise

ksagroup | | Permalink

If they don't want to raise taxes they certainly want to collect what is owed and many companies are delaying paying the PAYE when they get into difficulty. 

If your clients are having problems paying the PAYE then they may benefit from a time to pay programme.

rockallj's picture

What criteria will HMRC apply for this?

rockallj | | Permalink

Will this be new employers, those they deem to be a risk, how? I think that such criteria must be publically available and an appeal process put into place. Perhaps those with pheonix companies should be deemed such a risk?

Good idea in theory, but I am concerned at the heavy handedness that HMRC apply in other aspects of tax collection and housekeeping and so would be with this new power. This is laudable if and only when HMRC gets its own house in order!