»Ê¹ÚÌåÓýapp

»Ê¹ÚÌåÓýapp quantum is a formula we use to calculate the amount of security we require. It’s important that you use the formula set out in this chapter because tribunals have found it acceptable.

»Ê¹ÚÌåÓýappre are three sums to calculate

1. »Ê¹ÚÌåÓýapp estimated future revenue at risk should a person fail to make and/or pay a return.
2. »Ê¹ÚÌåÓýapp further estimated future revenue at risk built up while HMRC winds up a person’s business.
3. »Ê¹ÚÌåÓýapp actual debt a person has at the time we require security.

In VAT or environmental taxes, where a person makes quarterly returns, the estimated revenue at risk in step 1 above will be 3 months� tax. Where they make monthly returns the estimated revenue at risk will be 1 month’s tax.

HMRC estimate that the time taken to wind up a business (step 2) is 3 months.

»Ê¹ÚÌåÓýapp quantum calculation formula is as follows

1. »Ê¹ÚÌåÓýapp amount of tax shown by a tax return

• where a person makes quarterly returns a sum equal to the amount of VAT paid in 3 months
• where a person makes monthly returns a sum equal to the amount of VAT paid in 1 month.

1. »Ê¹ÚÌåÓýapp amount of tax at risk in the 3 months it would take to wind up a business is added to 1 above.
2. »Ê¹ÚÌåÓýapp person’s debt at the time security is required is added to 1 and 2 above, see SG34000.

»Ê¹ÚÌåÓýapp total of the figures in the three steps above is the amount of security we require.

You may have return and payment information on file that will allow you to accurately calculate the amount of security required, see SG32200.

Where you do not have returns on file you may need to estimate the figures using taxable turnover, see SG32300.

Whichever method you use to calculate the amount of security required you should arrive at a figure that is reasonable and proportionate to the revenue at risk.