U1: Security for VAT

Security before giving VAT credit

"(1A) If they think it necessary for the protection of the revenue, the Commissioners may require, as a condition of making any VAT credit, the giving of such security for the amount of the payment as appears to them appropriate." (VATA 1994, Sch 11, para 4(1A))

Security as a condition of making or receiving taxable supplies

"(2) If they think it necessary for the protection of the revenue, the Commissioners may require a taxable person, as a condition of his supplying or being supplied with goods or services under a taxable supply, to give security, or further security, for the payment of any VAT that is or may become due from—

(a) the taxable person, or

(b) any person by or to whom relevant goods or services are supplied.

(3) In sub-paragraph (2) above “relevant goods or services” means goods or services supplied by or to the taxable person.

(4) Security under sub-paragraph (2) above shall be of such amount, and shall be given in such manner, as the Commissioners may determine." (VATA 1994, Sch 11, para 4(2) - (4))

Security as a condition of making or receiving taxable supplies

Security before giving VAT credit

Non-established persons

"(7) The Commissioners may require a person in relation to whom the conditions specified in paragraphs (a), (b) and (c) of subsection (1) are satisfied to provide such security, or further security, as they may think appropriate for the payment of any VAT which is or may become due from him." (VATA 1994, s.48(7))

"(1) Subsection (1ZA) applies where any person—

(a) is a taxable person for the purposes of this Act or, without being a taxable person, is a person who makes taxable supplies or who acquires goods in the United Kingdom from one or more other member States;

(b) is not established, and does not have any fixed establishment, in the United Kingdom;

[...]

(c) in the case of an individual, does not have his usual place of residence or permanent address in the United Kingdom." (VATA 1994, s.48(1) - these conditions relate to the appointment of VAT representatives)

"(7C) A requirement under subsection (7)—

(a) may specify a time by which it (or any part of it) must be complied with;

(b) may be varied;

(c) continues to have effect (subject to any variation) until it is withdrawn." (VATA 1994, s.48(7C))

Security recoverable as VAT

"(7A) A sum required by way of security under subsection (7) above shall be deemed for the purposes of—

(a) section 51 of the Finance Act 1997 (enforcement by taking control of goods or, in Northern Ireland, by distress) and any regulations under that section, and

(b) section 52 of that Act (enforcement [by taking control of goods or, in Northern Ireland, by diligence),

to be recoverable as if it were VAT due from the person who is required to provide it." (VATA 1994, s.48(7A))

Non-established persons