Where HMRC think that a new VAT registered business represents a ‘risk to the Revenue,’ they can require Security as a condition of seeking to trade.
The taxpayer can have the decision reviewed in principle, or request that the amount of the Security be reduced. He cannot ignore the formal Notice of Security as that triggers a potential CRIMINAL OFFENCE.
In the case of Tower Hire & Sales Ltd HMRC sought Security because previous companies in which the sole director had been involved had gone into liquidation owing HMRC substantial sums.
But HMRC’s work was sloppy and they had drawn unwarranted conclusions from the history of the other companies.
The Appeal was allowed, which is unusual for Security Appeals.
http://www.bailii.org/uk/cases/UKFTT/TC/2019/TC07423.html
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