VAT compliance ― security for VAT

Copyright © 2025 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance

VAT compliance ― security for VAT

Copyright © 2025 LexisNexis
Produced by a Tolley Value Added Tax expert
Value Added Tax
Guidance
imgtext

This guidance note describes the circumstances under which HMRC is entitled to request that a taxpayer provides security in respect of VAT credits.

When security will be required for VAT

VAT law gives HMRC the power to require a person who is or is required to be registered for VAT to give an amount of security for the ‘protection of revenue’ (ie where there is a serious risk that the taxpayer will not pay VAT which is or becomes due).

HMRC may require this security to be paid either pre or post-verification.

Pre-verification security may be required where HMRC offers to make payment prior to carrying out a full verification and either:

  1. •

    the claim is for at least £500,000 and HMRC requires time to verify that it is valid

  2. •

    the business has submitted a claim that HMRC has reason to believe may be inaccurate or invalid

  3. •

    HMRC has reason to believe that the business could be involved in missing trader fraud

Post-verificiation security may be required where

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  • 20 Jun 2025 09:10

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