Security for payment of PAYE from employers with history of non-compliance
The measure
HMRC will be empowered to require employers to provide a financial security where PAYE or National Insurance is at serious risk. HMRC will set the security required according to the potential tax liability involved, although employers will have a right of appeal.
The new regulations will introduce a new criminal offence for employers who fail to pay the security and impose fines of up to £5,000.
Who will be affected?
The measure will affect employers who have a history of serious non-compliance in terms of paying late or not paying PAYE or National Insurance. HMRC will issue security notices to such employers.
When?
The intended date for the new regulations is 6 April 2011, and a 12 week consultation period on the regulations is proposed.
This would seem to be another measure targeted at employers who deduct PAYE and National Insurance but fail to handover the deductions to HMRC. We assume that the measure is aimed at employers who are persistently non-compliant. However, when the regulations are released for consultation we will be able to establish whether they have broader application.
