Security for PAYE and NICs – LITRG response

Published on 9 February 2011

The net has gradually been closing on employers who deduct PAYE and NICs from employees’ wages but fail to pay it over to HMRC. The proposed draft legislation to force problem payers to put up security is up for debate. LITRG thinks more protection is needed for the innocent.

On 9 December 2010, HMRC launched a consultation on Security for PAYE and NICs.

In response, we outlined some concerns.

  • First, that whilst the draft legislation excludes ‘care and support’ employers (those in receipt of direct payments allowing them to manage a disability and live independently), HMRC’s systems need to be adjusted to identify those employers separately. Without so doing, HMRC will not be readily able to prevent misuse of the new power.
  • Second, the new PAYE penalties regime is still in its early days of implementation and it would be helpful to have HMRC’s assessment of its impact in advance of implementing this additional power.
  • Third, safeguards against any new HMRC power are important. We are concerned that the draft legislation is too open and we would therefore prefer to see safeguards for taxpayers specifically included in the law rather than left to interpretation through HMRC guidance material.

A link to our full response to the consultation is given below.

Security for PAYE and NICs – LITRG response


Contact : Kelly Sizer or Jan Tish (please use form at