New powers to
tackle employers who try to dodge paying their PAYE or National
Insurance contributions (NICs) come into effect this spring.
From April 2012, HM Revenue & Customs (HMRC) can require
employers to pay a security, where there is serious risk that they
won’t pay over their PAYE tax deductions or NICs.
The new power will be targeted at employers who deduct money from
employees’ pay packets, under the pretext of paying their
employees’ income tax and NICs, but have no intention of paying it
to HMRC. These employers often build up substantial PAYE and NICs
debts, and ignore HMRC’s attempts to contact them. In many cases,
the business becomes insolvent, to avoid tax, and sets up a new
company soon after, to continue trading (known as a “phoenix company”).
This is an extension of a power that has already been
successfully used for VAT, insurance premium tax and environmental
taxes, and will not affect employers who have genuine payment difficulties.
The required security will usually be either a cash deposit from
the business or director, or a bond from an approved financial
institution that is payable on demand. HMRC will calculate the
amount of the security on a case-by-case basis, depending on the
amount of tax at risk, the employer’s previous behaviour and other risks.
Businesses that fail to provide a security face a fine of up to
£5,000, which will be enforceable by the courts.
More information on the new measure can be found at www.hmrc.gov.uk/thelibrary/tax-paye/paye-securities.htm
Employers who have genuine problems paying their PAYE and NICs
should contact HMRC as soon as possible. Visit www.hmrc.gov.uk/payinghmrc/problems/cantpay.htm
for more details.
Follow HMRC on Twitter @HMRCgovuk
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Issued by HM Revenue & Customs Press Office Press
enquiries only please contact:
Contacts:
HM Revenue & Customs Press Office
HMRC-Press-office.NDSmanagement@hmrc.gsi.gov.uk
Jan Marszewski
Phone: 020 7147 0798
jan.marszewski@hmrc.gsi.gov.uk
HMRC Out of Hours
Phone: 07860 359544
NDS.HMRC@coi.gsi.gov.uk