Extension of the Security Deposit Legislation from April 6th 2019.
The Security Deposit Legislation is something that has historically been implemented by HMRC but, so far has not been extended to include the Construction Industry until now.
The Security Deposit legislation allows HMRC to require a deposit or bond that is to be paid by the tax payer where HMRC believes there may be a risk of non-compliance.
An extension into the Construction Industry Scheme would mean that individuals or companies, inspected by an HMRC officer, would have to make a security payment to HMRC for the amount of CIS deductions that the person is or may be liable to pay HMRC, as this would be “necessary for the protection of revenue”
Securities will be ‘targeted specifically at high risk businesses that have historically failed to comply with their tax obligations, or where those behind the business are connected with previous business failure that resulted in loss of tax’
Where a company is required to provide a security, the Regulations may allow HMRC to include the company’s directors and officers as liable persons.
