U2: Security for PAYE and NICs

Appeal is partly appellate partly supervisory

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The legislation is drafted differently to the VAT legislation

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“Accordingly, although I accept that the Tribunal’s jurisdiction in relation to security for PAYE and NICs is to some extent supervisory in nature, it is an appellate jurisdiction.  The supervisory approach, that is having regard to the reasonableness of HMRC’s decision is, in my view, limited to the matters referred to in Reg 97N, namely whether the giving of security is necessary for the protection of the revenue.  It is not for the Tribunal itself to second guess that exercise of judgment, so long as it has been exercised reasonably within the terms expressed in John Dee…All other aspects, on the other hand, are matters on which the Tribunal is entitled to form its own view, and on doing so to confirm, set aside or vary the Notice of Requirement.  That includes whether the appellant is a person from whom security may be required, the value of the security to be given, the manner in which it is to be given, the date on which it is to be provided and the period of time for which the security is required.  The value of the security and the manner in which it is to be provided are included amongst these matters; in contrast to the VAT security provisions which provide, at para 4(4), that the security is to be of such amount and given in such manner as HMRC shall determine, the PAYE Regulations merely require those matters to be specified in the Notice, and the power of the Tribunal to vary the requirements in the Notice, in my view, renders these matters susceptible to substitution of the Tribunal’s own view.” (D-Media Communications Ltd v. HMRC [2016] UKFTT 430 (TC), §§20…21 on the facts, the FTT reduced the security required from £147,134 to £25,000).