HMRC Security Deposit Regime to be Extended
The security deposit legislation is to be extended to both Corporation Tax and Construction Industry Scheme (CIS) deductions from April 2019. The security deposit regime allows HMRC to require security from high-risk businesses where there is a serious risk that taxes owed will not be paid.
At present HMRC’s security deposit powers only apply to VAT, PAYE and National Insurance Contributions, Insurance Premium Tax (IPT) and some environmental and gambling taxes. This measure will give HMRC the power to require securities in relation to Corporation Tax and CIS deductions.
There are many reasons for non-payment of tax to HMRC including phoenixism where businesses evade tax by becoming repeatedly insolvent and a new company being set-up. These measures also target businesses that build up large debts to HMRC. The extension of these powers to Corporation Tax and Construction Industry Scheme (CIS) deductions will help target businesses that seek to fail to comply with their tax obligations.
The required security will usually be payable by electronic payment to a specified HMRC bank account, by cheque, by banker’s draft, a specified bank guarantee or by way of a payment into a joint HMRC/taxpayer bank account. The amount of security required is calculated on a case by case basis. If the business does not meet HMRC’s security deposit requirement they will have committed an offence and will be subject to a fine. Businesses required to pay a security deposit will have the option to appeal any decision by HMRC.
Posted by Cassey Nixon on
31st August 2018
Reporting Employee Changes
There are rules that businesses must follow when they are reporting employee changes. These changes must be sent to HMRC using a Full Payment Submission (FPS). The FPS is a submission that you need to make to HMRC every time you pay your employees and must be submitted on or before the usual date you […]
Planning A Christmas Party?
Now is the time that many businesses are planning their Christmas celebration for their staff, clients and prospective clients. The cost of a staff party or other annual entertainment is generally allowed as a deduction for tax purposes. If you meet the criteria written below, then there is no need to report anything to HMRC […]