Case Study Success: Notices of Requirement Withdrawn by HMRC

Our expert tax disputes team recently secured a rapid and favourable outcome for a client facing urgent HMRC enforcement action. The case involved security notices issued in respect of Pay As You Earn (PAYE), National Insurance Contributions (NICs), and Value Added Tax (VAT), putting the client’s business operations at immediate risk. Thanks to our in-depth understanding of HMRC powers and fast, strategic legal intervention, we were able to resolve the matter efficiently, protecting the client’s position and avoiding further enforcement or disruption.

Our swift response and strategic approach meant that HMRC’s actions were challenged immediately and resolved without delay. This successful outcome demonstrates our team’s proven ability to protect businesses under pressure and to navigate even the most complex tax disputes with precision and speed. We have a tested recipe for success when it comes to confronting HMRC enforcement, and our track record speaks for itself. If your business is facing pressure from HMRC, early legal intervention is essential, contact our expert team today for trusted, results-driven representation.

Understanding HMRC’s Notice of Requirement to Pay Security

A Notice of Requirement (NoR) for security is a formal written demand issued by HMRC to a business or individual, requiring them to provide a financial security, often a deposit, to cover future tax liabilities by a specified deadline. This measure is taken when HMRC has reasonable grounds to believe that the taxpayer may fail to meet their tax obligations going forward, based on past non-compliance, financial instability, or other risk factors.

What Does a Notice of Requirement for Security Involve?

• Purpose: The Notice of Requirement (NoR) acts as a mechanism to secure potential future tax payments from businesses or individuals deemed high-risk for non-payment.

• Scope: These security demands commonly cover taxes such as VAT, PAYE and NICs. HMRC may also require security for other taxes, including Corporation Tax in certain cases.

• Calculation of Security: The amount required typically reflects estimated tax liabilities for a period of four to six months, plus any outstanding arrears. For example, if a business is behind on PAYE/NICs payments for 12 months, HMRC might demand security covering those arrears plus several months of future liabilities, resulting in a substantial sum.

• Joint and Several Liability: When multiple directors or associated persons are involved, HMRC issues individual NoRs to each, making them jointly and severally liable for the full security amount.

Key Terms Explained

• PAYE (Pay As You Earn): A system where employers deduct income tax from employees’ wages and remit them to HMRC. Security notices for PAYE and NICs ensure employers meet these obligations.

• NICs (National Insurance Contributions): Contributions paid by employers and employees to fund state benefits. HMRC may require security to cover unpaid or future NICs liabilities.

• VAT (Value Added Tax): A consumption tax charged on most goods and services. HMRC may demand security if there is a risk that a business will not pay its VAT liabilities on time.

• Security Deposit: A sum of money or financial guarantee held by HMRC as assurance against the risk of unpaid taxes. Failure to provide this security is a criminal offence and can lead to prosecution and fines.

Case Study: Our Success for Our Client

In August 2024, our client received Notices of Requirement to provide security for PAYE, NICs, and VAT, imposing joint and several liability on both the company and its sole director. Despite the 30-day appeal period and warnings of potential criminal prosecution for non-compliance, no appeal was lodged within the specified time frame. They instructed us in mid-January 2025 to challenge these notices, citing personal circumstances as the reason for the late appeal.

Recognising the urgency, our expert tax disputes team swiftly filed Notices of Appeal with the First-tier Tribunal on 22 January, 2025, citing exceptional personal circumstances. We submitted compelling evidence and secured statutory protection to defer enforcement and stay potential criminal prosecution. Simultaneously, we negotiated a formal Time to Pay (TTP) proposal with HMRC, including a 28-month payment plan and facilitated full payment of the VAT liability.

Appeals Successful: HMRC Withdraws Security Notices

The result of exceptional: On February 3, 2025, HMRC withdrew all security notices relating to PAYE, NICs, and VAT. The PAYE and NICs notices were withdrawn to allow our client to negotiate a Time to Pay (TTP) arrangement, while the VAT notice was withdrawn following full payment of the outstanding tax as a tactical manoeuvre. This decisive outcome highlights the effectiveness of a well-prepared appeal combined with strategic negotiation in resolving complex tax disputes. Subsequently, the First-tier Tribunal allowed the appeals on 17 June 2025, after HMRC chose not to defend the case, leading to the cancellation of the scheduled hearing.

Challenging HMRC Security Notices: Key Strategies We Employed

The success achieved in this case underscores several vital strategies for businesses confronting similar HMRC security notices:

• Seek Legal Advice Early: Engaging specialist tax solicitors early ensured strict compliance with procedural requirements and strengthened the grounds for appeal.

• File a Proactive Appeal: Despite the late submission, a well-supported appeal citing exceptional circumstances demonstrated a serious commitment to resolving the dispute and prompted HMRC to reconsider its position.

• Negotiate a Time to Pay Arrangement: Proposing a formal Time to Pay (TTP) plan showcased willingness to meet tax obligations responsibly, facilitating constructive negotiations with HMRC.

Our expert tax dispute team played a crucial role in securing the withdrawal of the Notices of Requirement for our client. Our primary objective was clear: to have the security notices cancelled and we delivered precisely that. This case exemplifies how expert legal representation, combined with strategic negotiation and a robust appeal, can effectively prompt HMRC to withdraw enforcement actions and avoid potential criminal prosecution.

The Importance of Expert Legal Representation

This case underscores the value of partnering with seasoned tax law experts who can develop a thorough, well-founded, and persuasive appeal. Our dedicated tax dispute team played a key role in securing a favourable resolution.

Expert HMRC Tax Dispute Solicitors

if your business is confronted with an HMRC security notice, our expert legal team is here to help. We deliver customised strategies designed to support businesses navigating HMRC enforcement proceedings. They can assist with:

• Advising on compliance to avoid future HMRC enforcement.
• Challenging PAYE, NICs, and VAT security notices.
• Negotiating with HMRC for settlements and Time to Pay (TTP) arrangements.
• Filing appeals with HMRC and the tax tribunal.
• Representing clients in the First-Tier Tribunal (Tax Chamber).

We understand the complexities of tax law and are dedicated to achieving the best possible outcome for our clients. Contact us today for on ☎ 02071830529 | ✉ [email protected]