There is very little risk of criminal prosecution or imprisonment. Some people fear that failure to pay tax on time may leap to criminal prosecution and imprisonment. In fact, this is rare. HM Revenue and Customs does prosecute a small number of people every year, but all cases involve allegations of serious dishonesty or evasion. HMRC does not normally take such action just because someone has not paid their tax on time, or has difficulty finding the money to settle.

It is important to know what DMB will do if you refuse to seek an agreement, or cannot reach an agreement.

In such circumstances, DMB will consider taking enforcement action, which will be one of the following measures:

• Legally taking possession of goods for sale at public auction (formerly known as distraint),

• Summary Proceedings in the Magistrates’ Court (or Sheriff Court in Scotland),

• County Court proceedings,

• Bankruptcy.

Legally taking possession of goods is a process formerly called “Distraint”, whereby HM Revenue and Customs may take some of your possessions for sale at auction towards settlement of an unpaid tax bill. HMRC has the legal power to do this without any court order.

Threats of distraint or legally taking possession of goods should not be ignored, but it may be reassuring to know that:

• the first visit may be from a member of HMRC’s “Field Force”, local staff whose initial function is to check the debtor’s address, and make face-to- face contact with them, so as to see if matters can be sorted out without resorting to enforcement

• the HMRC officer should act within the law, and you need not fear the illegal behaviour that is sometimes reported of bailiffs who carry out the process for other debts

• the HMRC officer cannot force his way into your premises without a court order, and such orders are very unusual

HMRC may consider legally taking possession of goods which you consider to be ‘tools of the trade’; particuarly if you have no other assets. Vehicles can be particularly at risk. The fact that HMRC can do this without a court order means that all threats of distraint should be taken very seriously.

If you do not agree that you owe the tax demanded, or believe it is a lot less, you should tell the HMRC officer, but you will find that he is in a non-negotiable position once he is in your home.

What should you do?

Some people are very frightened by the thought of an HM Revenue and Customs officer turning up at their home and taking possession of their goods.

If so, the first thing is to ensure that you have done everything possible to pay the tax or reach an agreement with HMRC. But in some cases it is not possible to obtain an agreement.

If you are upset at the thought of the HMRC officer turning up at your home, you might be able to persuade him that such a visit would be pointless because you have no assets worth seizing, perhaps by offering a list of the main items that you own. If so, you should explain this to the HMRC officer and tell him you would prefer to deal with this on the phone, or come to see him at his office instead. If he will not agree to this, and makes a visit to your home, you do not have to discuss the debt with him there andhave the right to deny him entry.

You may be worried because you have a family member who suffers from poor health or stress, who might be very upset by such a visit. If so, you should explain this to the HMRC officer and ask him to visit at a time when that family member is expected to be out. He should normally agree, and it is a good idea then to write a letter to him confirming what has been agreed.

Points to note:

• HMRC does not normally take such action for debts below £100

• there are some goods that are protected from such action, in particular basic household goods and anything that is jointly owned with someone else.