From 6 April 2012 HM Revenue & Customs (HMRC) will be able to ask employers to pay a security where there is serious risk that they won’t pay over their PAYE tax deductions or Class 1 National Insurance contributions (NICs).
This will not affect the vast majority of employers who pay their tax on time and in full. And it won’t be used for employers who are having genuine financial problems.
Why HMRC has been given this new power
Businesses have repeatedly told HMRC that they resent the unfair advantage gained by those who don’t meet their tax obligations. HMRC is determined to pursue those who won’t pay, to make tax fairer for all.
HMRC can already ask for a security for VAT, insurance premium tax (IPT) and environmental taxes. They are effective – in around half the cases the trader becomes and remains compliant after receiving the first warning letter.
What is a ‘security’?
The required security will usually be either a cash deposit from the business or director – held by HMRC or paid into a joint HMRC/taxpayer bank account – or a bond from an approved financial institution which is payable on demand.
Follow link for more information. http://www.hmrc.gov.uk/thelibrary/tax-paye/paye-securities.htm