What is a HMRC security bond?
A security bond is almost like a deposit that a phoenix company is asked to pay to HMRC to protect them should that business be unable to keep up with
its tax responsibilities. If, in the future, that company is unable to pay the tax that it owes, then HMRC will use the security bond to pay the outstanding
Why have I been asked for a security bond?
If HMRC ask you for a security bond, you will receive a Notice of Requirement. This will provide details on how much you need to pay and when the payment
needs to be made. If you are a start-up company, then you are unlikely to receive a request for a security bond; they are usually only requested if
HMRC has a strong belief that you will not be able to keep on top of your tax responsibilities.
If you or another director setting up a company has been part of a previous company that was liquidated or sold through administration, especially if HMRC
are a significantly large creditor in comparison to other creditors, then you are more likely to be asked to provide a security bond.
How much will I have to pay?
The amount required to pay will vary from business to business. However, HMRC will typically look at any previous companies you have been associated with
and calculate between 4 and 6 months anticipated Crown liability.
Once you receive a Notice of Requirement, you are required to respond and pay by law.
Can a HMRC security bond be negotiated?
Yes, there is absolutely an option for negotiating with HMRC with regards to the security bond requested. If you have been asked for a security bond it
is important to take proper professional advice from someone experienced in dealing with HMRC negotiations. At ICS, we can either assist directly or
alternatively we have a number of relationships with firms who specialise in this area.