Dealing with HMRC Debt Collectors

If you have received a tax bill from HMRC that you are simply unable to pay, it’s essential you contact HMRC immediately to try and reach some sort of payment arrangement. Do so successfully and you can nip this problem in the bud. If you are refused a ‘Time to Pay’ arrangement and your bill remains unpaid, HMRC will start proceedings to recover the money. Ultimately, that enforcement action could end in the closure of your business.

The first action HMRC is likely to take is to apply interest charges and late payment penalties to any bill you do not pay. If you still cannot pay the debt you owe and HMRC is unwilling to agree to a payment plan, you could receive an enforcement notice and come face to face with HMRC’s debt collectors.

I’ve Received an HMRC Enforcement Notice

If you have received an enforcement notice from HMRC’s debt collectors, it is essential you understand your rights. Once the notice has been served, it is still possible to make a Time to Pay arrangement with HMRC. This will allow you to pay a lump sum and then repay the remaining balance over a longer period, typically 12 months.

Failure to pay the debt in full or reach a repayment agreement with HMRC within 14 days and the next stage in HMRC’s recovery action will begin. That is for HMRC’s debt collectors to arrive at your door. For that reason, an enforcement notice is not is not something you should ignore.  

What Happens when HMRC debt Collectors Arrive at your door?

If the tax bill remains unpaid, the next stage of enforcement action is for HMRC’s debt collectors or third party bailiffs to arrive at your premises. Their intention will be to identify goods they can seize and sell at auction to recover the debt. At this stage, you can still make the payment in full, although an additional charge will be added to the debt.

Failure to pay the debt at this stage and the HMRC enforcement officers or bailiffs will recover goods to the value of the debt and place these under a ‘Controlled Goods Agreement’. You then have a further seven days to pay the outstanding bill. Fail to do so and the enforcement officers will return to your premises to seize the goods and sell them at auction.

What are your Rights?

It is essential that throughout this process, you understand exactly what the HMRC debt collectors are legally entitled to do. To make an already confusing situation worse, you may have been visited by an HMRC enforcement officer or a third party bailiff. In reality, their powers are very similar. Both enforcement officers and bailiffs are legally entitled to force entry into solely commercial premises, but they must have been authorised to do so by the Court.  

Once they have entered your premises, HMRC debt collectors can seize goods to not only cover the debt, but also the cost of the enforcement action. As the goods are sold at auction, the assets very rarely sell for anything like their true resale price, which means goods with a value that far outweighs the debt will usually be seized.

Before removing the goods, the enforcement officers will visit your premises to list the goods to seize, which will form part of the Controlled Goods Agreement. If you sign the Controlled Goods Agreement, you will have seven further days to repay the debt. If you refuse to sign the agreement, the goods can be removed immediately. Once a Controlled Goods Agreement has been signed, you cannot sell any of the goods included in the agreement. To do so is a criminal offence that would only make your situation worse.

Can Enforcement Officers take Goods that Belong to you Personally?

No. A Limited company is a separate legal entity from the company directors, which means their finances are separate. That means personally owned assets like your house and your car will be safe. However, if the car is owned by the company, it can be seized to help satisfy the company debt.

Need Advice?

Are you facing HMRC enforcement action for a debt you cannot pay? Are you unsure of your rights? Perhaps you’d like expert assistance when dealing with HMRC? For confidential and free advice, please get in touch with our team.  

Read more about problems with HMRC