Notices of requirement reasonably issued

The taxpayer company developed blockchain solutions for regulated insurance markets. The other taxpayer Mr Saggu was a director. The business was primarily conducting research and development (R&D) had little revenue from customers and relied heavily on funding from external investors.

In July 2022 HMRC issued notices of requirement for PAYE and National Insurance contributions making both taxpayers jointly and severally liable to provide the security. HMRC stated that if the security was not paid by a particular date both taxpayers may face criminal prosecution. After receiving the notices the taxpayers said they would like to make a time-to-pay agreement but wanted to wait until the company had received some external investment and had also made an R&D claim. HMRC was willing in principle to agree.

However in September HMRC informed the taxpayers that an offence had been committed as no security had been...