What is a NOR from HMRC?
A Notice of Requirement to give security – ‘NOR’ – is an HMRC notice which can be issued by the tax authority to any business behind on its VAT or PAYE payments, writes former Revenue inspector Jesminara Rahman, a tax investigation specialist and director of Tax Resolute UK.
Why do contractor limited companies receive a NOR?
So, a NOR is a formal written notice issued by HMRC to a taxpayer that the tax authority requires security (a deposit of money) from, by a specified date.
HMRC takes the step of issuing a NOR when there has been poor VAT/PAYE compliance, and a NOR is it requiring a deposit against future VAT/PAYE payments.
If future VAT/PAYE payments are then not paid, HMRC takes payment from the security provided by the taxpayer.
Can contractors appeal a NOR, and if so how?
Fortunately, there are various grounds to appeal the notice.
But it is important to ensure that all payments are up-to-date. If they aren’t up to date, then it is recommended you take out a Time To Pay (TTP) instalment plan with HMRC.
And here’s a top tip limited company contractors -- the fact that a TTP is in place can be used to appeal the NOR.
NOR: Timeframes, non-compliance, and criminal prosecution risk
You’ll have 31 days to appeal the NOR. Or you can request a review of the decision, whereby another HMRC officer will review that the NOR has been correctly issued. Afterwards, you could then submit an appeal if the review does not reach an agreeable conclusion.
What you should NOT do, is ignore the notice!
Ignoring a NOR can lead to HMRC concluding that the taxpayer is illegally trading by not complying with the NOR and can lead to a criminal prosecution and fine.
When in doubt, consult a professional tax adviser.