HMRC has published a policy paper ‘Extension of security deposit legislation‘ which looks at extending the scope of the existing security deposits regime to include Corporation Tax and Construction Industry Scheme (CIS) deductions.

Legislation has been included in Finance Act 2019 and has been released alongside HMRC’s policy document.

HMRC can currently require high-risk businesses to provide an upfront security deposit in respect of VAT, PAYE  and National Insurance contributions as well as other less mainstream taxes and duties. Ths can take the form of a cash deposit or bond authorised or approved by a financial institution.

HMRC consider that, when used in a carefully targeted manner, securities can be very effective in changing the behaviour of non-compliant businesses and protecting future revenues against the risk of non-payment.

From 6 April 2019 HMRC will have the power to require securities in relation to:

  • Corporation Tax and
  • CIS deductions
    • where an HMRC officer considers that it is necessary for the protection of the revenue.
  • There will be a right to review by HMRC and a right to appeal to the tribunal against a decision to request security or as to the amount, terms or duration of the security.
  • Failures to comply with a request for security will be a criminal offence and subject to fines.


PAYE: security against non-payment 

CIS: Contractors and sub contractors


Extension of security deposit legislation 



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