Enforcement action

You need time to pay guide


There is very little risk of criminal prosecution or imprisonment for tax debt. Some people fear that failure to pay tax on time may lead to criminal prosecution and imprisonment. In fact, this is rare. HM Revenue and Customs does prosecute some people every year, but these cases involve allegations of serious dishonesty or tax evasion. HMRC does not 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 Debt Management (DM) will do if you refuse to seek an agreement, or cannot reach an agreement.

HMRC has a range of enforement measures that vary between England and Wales, Scotland and Northern Ireland. What measures are taken will depend on each individual case and the taxpayer’s circumstances. The measures that can be taken are:

Taking control of goods

The Taking Control of Goods regulations apply to England and Wales and allow HMRC to remove and sell assets to cover debts. In Northern Ireland this is called distraint.

Threats to take control of goods should not be ignored. The procedure is:

HMRC will never take possessions that are essential to the taxpayer’s security, wellbeing or the running of a viable business. This includes items such as cookers and bedding. Tools of the trade are exempt up to a value of £1,350 but HMRC may consider taking tools in excess of this limit unless the items are essential for the runing of the business. Vehicles are particularly at risk.

If you do not agree that you owe the tax demanded, or believe it is a lot less, you should tell the HMRC officer.

There are flat fees for taking contril of goods plus a fee based on the value of goods sold at auction.

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 control of their goods.

The first thing is to ensure that you have done everything possible to pay the tax or reach an agreement with HMRC about paying by instalments. Sometimes this is not possible, and you may need to consider the following.

Home visits

If you are upset at the thought of an HMRC officer turning up at your home, you might be able to persuade HMRC that such a visit would be unproductive because you have no assets worth seizing.

You could perhaps offer a list of the main items that you own, or agree to meet the HMRC officer at an alternative, neutral location. This may be appropriate if there are other people living at the address who might be concerned about a home visit from HMRC.

This is particularly likely to be so if you have a family member who suffers from poor health or stress, who might be very upset by such a visit. In such cases you may ask HMRC to call at a time when that family member is expected to be out. If this is agreed, it is a good idea to write a letter confirming what has been agreed.

If you are staying with friends or family, you should tell HMRC. HMRC may refrain from making a home visit to a ‘care of’ address – on the basis that the taxpayer owns nothing of value at the premises.

If HMRC will not agree and insists on a home visit, you have the right to deny entry. However, once you have opened the door you are considered to have given peaceful entry and cannot then stop the visit or recovery proceedings.

Further guidance

On the HMRC website

Technical guidance on taking control of goods (distraint)  http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM655000.htm

Direct Recovery of Debt

HMRC can take money directly from your bank and building society accounts, including funds held in cash in Individual Savings Accounts (but not from stocks and shares ISAs), where there is a debt to HMRC of £1,000 or more. This applies to England, Wales and Northern Ireland. In Scotland, funds can be taken from a bank accountvia a Summary Warrant after a failure to pay.

There are stringent safeguards to ensure that taxpayers do not suffer undue hardship and that there is adequate protection for vulnerable individuals. There main safeguard are:

There is a full list of the safeguards on the Gov.uk site here.

There is more information on the this in the link below:

Direct Recovery of Debts – vulnerable customers guidance: