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When security deposits for PAYE and CIS are used

HMRC is able to ask employers for a security where there is a serious risk that they will not be able to pay over their PAYE and Class 1 National Insurance deductions to HMRC. The power is used by HMRC in high risk situations such as employers who:

1. •

   deliberately choose not to pay

2. •

   run up PAYE debts in their companies, close down their companies writing off the debt and then set up new ones to evade tax

3. •

   build up large PAYE debts and penalties and do not respond to HMRC contact

ITEPA 2003, s 684(4B); SI 2003/2682, reg 97N

From April 2019, the security deposit regime is extended to