HMRC Notice of Requirement: Meaning and Finance Options
By Oliver Mackman · Reviewed 2026-05-09
You have received an HMRC Notice of Requirement to provide security, typically for VAT, PAYE or NIC. HMRC is demanding a cash deposit or bank guarantee before allowing the company to continue trading on the affected tax line.
What this is
A Notice of Requirement (NOR) is a formal HMRC demand for security, issued under VATA 1994 Schedule 11 (for VAT) or under separate powers for PAYE / NIC. It is used where HMRC believes there is a serious risk of unpaid tax. The notice specifies an amount (typically equivalent to 4 to 6 months of expected liability), a deadline (usually 30 days), and the form of security accepted (cash deposit or bank guarantee). Trading on the affected tax line without complying is a criminal offence.
What happens if you do nothing
Failure to provide security is a criminal offence under section 72 VATA 1994 (for VAT) and similar provisions for PAYE / NIC. Continuing to trade VAT-registered without lodging the security can lead to prosecution. The directors named in the notice can be made personally liable. Commercial implications: most mainstream lenders will not engage during the security period because the cash demand sits outside the trading P&L and a winding-up risk is implicit.
Options, in order
- Engage a tax adviser or solicitor immediately. NORs can be challenged within 30 days via the First-tier Tribunal if the underlying basis is incorrect.
- Negotiate the amount or form of security with HMRC. Bank guarantees from a UK bank are preferred to cash deposits because they preserve company cash flow; HMRC accepts both.
- Raise a commercial term loan to fund the cash deposit if a guarantee is not available. Specialist lenders (Bizcap, JPM Capital, Acorn) engage with NOR cases that mainstream banks decline.
- Asset-backed bridging against owned property can release the cash without unsecured-lending stress; Allica and Shawbrook engage at £150k+.
- If the underlying business cannot fund the security, a licensed insolvency practitioner should review viability before any further borrowing.
Which UK lenders engage
- · Bizcap or JPM Capital for specialist post-pressure cases that mainstream lenders decline.
- · Acorn Commercial Finance for asset-backed cases against owned commercial property.
- · Allica Bank or Shawbrook for £150k+ tickets against asset security.
- · A small number of UK banks issue bank guarantees in the NOR amount; talk to your relationship bank early.
- · Specialist NOR-aware brokers via our broker panel.
HMRC-specific notes
NORs are issued by the HMRC Securities Team. The notice will name the directors who are required to give the security; this is a personal as well as corporate exposure. The 30-day window includes the right to appeal and the right to negotiate the amount. HMRC will sometimes accept a phased deposit if cash flow genuinely supports it, though this is at HMRC discretion. Filing the next return on time is critical: a missed return during the NOR period accelerates enforcement.
Do not do this
- · Continue trading on the affected tax line without lodging the security or formally appealing. That is a criminal offence under section 72 VATA 1994 and similar provisions.
- · Pay HMRC from operational cash earmarked for VAT or PAYE coming due. The new liability becomes a fresh enforcement risk on top of the NOR.
- · Take an MCA or daily-repayment product to fund the security. The daily-repayment cash drag while NOR cash sits parked with HMRC is structurally damaging to the business.
- · Restructure the company (new entity, transfer of trade) without legal advice. HMRC has anti-avoidance powers including transferred-liability orders.
When to call an advisor before borrowing
Always for an NOR. Engage a tax adviser or solicitor inside the 30-day window before the deadline. If commercial finance is being considered, a licensed insolvency practitioner should review viability first; an NOR is a strong HMRC signal that the underlying business may not be able to support continued trading without restructure.
Related
- · All HMRC pressure scenarios
- · Our post-decline routing (if mainstream lenders have declined)
- · After a decline: alternative lenders
Editorial only. We are not an FCA-authorised adviser or licensed insolvency practitioner. For active enforcement action, contact a licensed insolvency practitioner directly.