The draft Finance Bill 2011 provides HM Revenue and Customs (HMRC) with the power to request security for PAYE and National Insurance contribution payments from employers.
It is thought that up to £800 million was lost in 2009 from firms who went under before paying PAYE and NIC monies that had been deducted from employees’ salaries.
The government is consulting on whether to make failure to comply with a demand for security a criminal offence.
The requirement that employers offer security for PAYE and NIC payments was first mooted in the previous government’s final Budget in March 2010.
The draft document said: “HMRC estimates that the Exchequer lost between £600 million and £800 million a year between 2005 and 2009 in PAYE and NIC debts that had been built up by employers who then became insolvent. This is money that had been deducted from workers’ pay but was not paid to HMRC.”