What is an HMRC security notice?
An HMRC security notice is a demand for a deposit against future VAT or PAYE liabilities. It is issued where HMRC believes there is a risk that your business may not pay its taxes going forward.
Read more: What is an HMRC Security Notice (and what does it mean for your business?)
Why has HMRC sent me a security notice?
Usually because of a pattern of late payments, such as failed Time to Pay arrangements, or growing arrears. It is rarely triggered by a single issue.
Read more: Why has HMRC sent me a security notice?
Are HMRC security notices becoming more common?
Yes — we are seeing more of them, particularly for PAYE and National Insurance. HMRC is now taking a more proactive approach.
Read more: Are HMRC security notices becoming more common?
How much is an HMRC security notice for?
Typically based on 3–6 months of expected VAT or PAYE liabilities. This can be a significant amount, especially where cash flow is already tight.
Can HMRC get the amount wrong or set it too high?
Yes, in some cases. Amounts are based on estimates, and where those assumptions are incorrect, it may be possible to challenge or reduce the figure.
Can you negotiate an HMRC security notice?
Sometimes — but not always. HMRC may be open to discussion where there is a viable business and genuine engagement. If you need advice on where to start with this, don’t hesitate to contact us for a free initial discussion.
Read more: Can you negotiate an HMRC security notice?
Can you pay a security notice in instalments?
It’s not standard, but it can happen in some cases depending on the circumstances.
What happens if I don’t pay the security notice?
Ignoring it is not a safe option. You may face enforcement action, personal liability, and in some cases criminal consequences.
Read more: What happens if I don’t pay an HMRC security notice?
Can I continue trading if I don’t pay it?
Continuing to trade without dealing with the notice increases risk, particularly for directors.
Can HMRC cancel my VAT registration?
Yes. If the required security is not provided, HMRC can withdraw VAT registration, which can make trading very difficult.
Do HMRC security notices affect directors personally?
They can. Directors may become personally liable if the notice is not complied with.
Read more: Do HMRC security notices make directors personally liable?
Can a security notice force my company into liquidation?
Not directly — but it can act as a tipping point if the business cannot meet the demand.
Read more: Can an HMRC security notice force a company into liquidation?
Can I appeal an HMRC security notice?
Yes, but appeals are not straightforward and require strong supporting evidence.
Why does this feel like it’s come out of nowhere?
From a director’s perspective it often does, but HMRC decisions are usually based on a pattern over time. The key thing is to act and respond appropriately.
What are my options if I’ve received a security notice?
Your options depend on your situation, but as a broad overview they may generally include:
– Paying the security if affordable
– Attempting to negotiate
– An honest review of whether the business is viable
– Considering formal insolvency options where appropriate
Read more: What should I do if I receive an HMRC security notice?
Final thoughts
HMRC security notices are becoming more common and can have a significant impact on a business. If handled appropriately, however, they can be properly and effectively managed. The key is not to ignore the situation and to act early.
Need advice?If you’ve received a security notice and are unsure what to do next, taking advice early can help you understand your options and protect your position as a director.