Employers with a history of avoiding PAYE and National Insurance (NI) payments will have to make upfront security payments to HM Revenue & Customs (HMRC) from April.
Firms that fail to pay the deposit will be fined up to £5,000 as HMRC looks to crack down on those companies which deliberately dodge employee tax payments. HMRC revealed that the new system would target between 360 and 400 businesses in its first year of operation. "Although the vast majority of employers pay their taxes as they should, there is a problem. It’s about taking money off employees, saying they are going to pay it over to HMRC and then not doing so."
Companies deliberately avoiding VAT, insurance premiums and environmental tax are already required to make security payments via either a cash deposit or an approved bond, payable on demand. HMRC will decide on how large the payment, as well as any fines, should be on a case-by-case basis.