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Breach of Human Rights by HMRC Collector ?

A client who ownes a restaurant has just been visitied by an HMRC distraint officer collecting outstanding VAT which was due and payable. When the officer was on the premises I was telephoned in my office by the client asking for help. I spoke to the collector and asked for a copy of the walking possession order before my client signed it. I was told that under no circumstances would my client be allowed to fax the document to me without it being signed first and if he did not sign it then a van would be immediatly dispatched to collect the tables, chairs and coffee machines that the officer had listed, my client had no choice he had to sign the walking possession order. I was outraged at being unable to view the document that my client was being asked to sign.

Is this practical inability to access professional advise a breach of my clients Human Rights?

Does anybody know if tables, chairs and a coffee machine could be deemed tools of the trade?

Any thoughts most welcome as I am preparing a complaint to HMRC in a fairly short time frame.

Thank you

      

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Human Rights

Here is what the Human Rights Act says

 

Protection of property

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

 

I have to say that, for my money, HMRC are not in breach of the Human Rights Act here.

David
 

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David

Thank you for your input.

I think that I was so incensed at being unable to see the document that my client was being asked to sign I just assumed it was a breach of his human rights. I think these "shot gun" techniques … you either sign this order without reference to professional representation or we close down your business now … is the way of extracting the most amount of money in the minimum amount of time. I think it’s immorally to deny my client proper representation but there seems to be little that I can do at this stage.

Kind regards

Gary

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He is there tto sieze goods

You have to remember he is there to actually seize goods.  The form is just a method by which they do it without removing the goods from the actual premises.  There are only 2 choices in such cases, if the client does not sign then the goods will be removed.  The only item up for debate is the length of time given to reach settlement before the goods are seized, and even then that is really down to the bailiff and your client would have no power to enforce any other date than the one offered.
 
The question really is down to why has your client let it get this far without doing something.  This is the final stage in a long process where there are many stages where arrangements can be made to pay the debts or if really that bad, to seek bankruptcy.
 
I doubt you could claim he has been denied access to a professional, as he had you available to talk to.  The fact you feel you should have been given more information does not deny him the fact he had access to you and therefore any claim under Human Rights would fail on the grounds stated.

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So I eat in the restraunt, pay my meal (out of my net pay) which includes vat and I assume that the business owner pays to the government the vat I have give to him.  it appears that the business owner has not done this so the government tries to collect what it can to recover my money. where did my money go.  without knowing the full facts my sympathy is limited. sorry.

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Thank you all for your input, not necessarily what I wanted to hear but still very much appreciated.

The restaurant owner had agreed with the Collector of Taxes to settle by installments an older debt that had been delegated to a private collection agency, to make sure that the current VAT was paid on time and then to settle a more recent liability. The arrangement to settle the older part of his VAT arrears with a private collection agency was just finished and the current quarters VAT paid as the HMRC Distraint Officer turned up on the door step to collect the more recent liability. So yes the liability was fully expected but it had been arranged with the Collector of Taxes to settle other parts of the VAT liability in preference to this more recent liability that the Distraint Officer was collecting.

The latest development is that HMRC are trying to recover any tapes of the telephone conversations to confirm my clients claim that an arrangement was in place to settle other liabilities in preference to this debt being recovered by the Distraint Officer. In addition HMRC are now looking at the arrangement with the private collection agency to see if my client did indeed have an arrangement in place and if he kept up with that arrangement (which he did).

I am hopeful that as directed by HMRC Collectors my client has settled other elements of the liability in preference to the more recent liability, that I may be able to convince HMRC that he has abided by previous arrangements. I may then be able to convince them that the most effective way of securing the balance of VAT is by letting him pay this current arrears by installments. The chances of him paying a VAT liability after HMRC have removed his tables, chairs and coffee machine and therefore his ability to trade is remote.

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Have a look at this thread

http://www.accountingweb.co.uk/anyanswers/distraint-notice-can-hmrc-really-do 

Too late for your client if he has signed the Order, but something for the future perhaps.

I have had a couple of examples of this where the aggressive Collector was invited (politely, of course) to sling his hook - which he did. The trouble is, most clients - and many advisors - don't know that HMRC distraint powers are ineffective without the WPO which is, of course, the reason they want it signed!

It does not stop them seeking recovery, naturally, but it does buy what could be valuable time and negotiating space while they go through the motions of court proceedings.

 

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WPO not required

They are not powerless once you have let them in (So don't let them in).  They need nothing further from you to distrain your goods.  The WPO only allows you to keep the goods rather than removing them then and there.  If you do not sign a WPO they can simply have the goods removed.

If you refuse them entry you are just delaying the inevitable, they will be back with a court order allowing forced entry and a further charge added to the growing levy.

I am suprised that people really allow debts to get this far whent he courts are so willing to make arrangements to avoid this.  If you do let it get this far you will NOT get much sympathy from the courts, especially if you have not tried to make arrangements to pay or have defaulted on such payments.

 

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The point is

that to get a court order they have to go before the magistrate at which time the client can appear and put forward alternative proposals etc, which the court may - or may not - agree with - but at least the client has the opportunity. It also buys time during which it may be possible to raise the funds required to clear the debt. If he signs a WPO, that's it, he has actually granted them the right to remove the goods failing payment within a (usually very short) period of time.

I fully agree that entry should always be refused, keep them on the doorstep.

The problem is that I have yet to meet a Collector who will stand at the door and explain this to a taxpayer - perhaps unsurprisingly. The normal aggressive approach is to suggest that a WPO is the only option or else, totally unprofessional IMHO.

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Hope there were no diners using the tables at the time.

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I think you miss the point

The collector/bailiff is not there to explain it all.  They have come to seize goods so the debt can be repaid.  To get this far it will have already been to the magistrates and action should have been taken then, not wait till they are seizing goods. 

Before a bailiff/collector appears on your doorstep there will have been many other attempts to request payment.  If you ignore all those letters and court actions then you will end up with the collector/bailiff on your doorstep.  Why then do you expect that they should stop a warrant action to explain it all and give you further time to delay in settling your outstanding debt?

The WPO is the only option when you consider that the other option is to have your goods removed then and there.  However, I would agree that the WPO is no option if in reality you will be unable to settle the debt within the time limit on the WPO.

 

I am interest in what other action you see as possible for the collector/bailiff in this situation.

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Crossed wires

Sorry Alan, I think we are getting wires crossed here. I am talking about the situation where a Collector turns up on the doorstep threatening distraint and seeking a WPO signed BEFORE any court action has been attempted i.e no Process in Debt issued (which would afford the client an opportunity to attend court and plead a case). I agree that once the court has awarded judgement in favour of HMRC it is a different matter, by then there should be no doubt as to HMRC powers to collect.

It is the way in which certain Collectors misrepresent their powers that I object to. Whether this is down to poor training or deliberate action I don't know.

I have twice been on client premises, within the past 12 months, when such a collection attempt has been made along the lines of "I am here to distrain your goods, sign here please and what have you got that I can take with me" and twice the Collector has left empty handed having failed to get a WPO signed.

I am not suggesting for one minute that the tax should not be paid, of course not - I am simply objecting to the tactics employed which could easily have the effect of destroying a business and/or causing considerable stress when better options e.g. IVA or CVA or just a simple time to pay arrangement may be available to clients to dig themselves out of a hole.

I hope that explains better where I am coming from on this.

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It does
Something is clearly wrong if distraint is being used withou sufficient grounds for it. The WPO can only be used where there is legal grounds for distraint, any othe use and it is worthless.

Clearly in the cases you describe the baliffs or collectors are acting without any legal grounds and should be reported. I am aware that there are good and bad baliffs. But in all cases it is important to report them if they are acting without authority or step over thier duties.

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HMRC powers to seize goods

 Thank you again for all of your input especially your comments regarding a possible misrepresentation of powers by HMRC Collectors.

The client's only previous correspondence on the matter was a warning letter suggesting that the debt was overdue and that HMRC would be taking distraint action. On receipt of this letter my client spoke to HMRC and made an arrangement so thought no more of it. This arrangement was independently confirmed by me. The client has not been to court and no judgment is in place.

In this situation where the Collector is inside the restaurant, taken a list of assets and is demanding a WPO be signed could my client have politely asked them to leave the premises. What actually happened is the Collector gave my client an ultimatum either sign the WPO immediately (without sending it through to me) or they would immediately dispatch a van to collect goods to sell at auction.

I may have misunderstood your comments but it seems to me that without the WPO signed HMRC would have no power to distrain upon goods without a court order.

If this is the case then I will make my representations to HMRC again as I feel very aggrieved about HMRC’s attitude to the collection of this debt.

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Stepping over the mark..

..certainly seems to have happened here. It is my understanding, based on the circumstances described, that HMRC were acting beyond their powers in threatening your client this way. In the absence of a judgement for the debt, unless your client willingly agrees to give them goods, they cannot just send round a van to lift what they like. The problem here is that the WPO is, in effect, that willing agreement i.e your client has agreed to give them possession of the specified items failing payment in cash by a specified date.

As stated above, I have twice been with clients in similar circumstances where the Collector was obliged to withdraw empty handed - and no van subsequently turned up! The clients in question then proceeded to deal with the matter by agreement and that was that.

I am not legally trained, of course, and all of this is my understanding based on what I have read and personally experienced. If you search the net you will find lots more about this.

If you do make representations, do please come back and let us know the response.

 

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I think I may have to admit defeat !

I have done a bit more research on this matter, spoken to a senior officer in the Debt Management & Banking Complaints Team and read the HMRC manual from DMBM655710 to the end of the section.

I am afraid I cannot find the comfort I needed to question the stance of the distraint officer. As mentioned, this debt was not the subject of a court hearing and / or judgment and therefore I was hopeful that the officer was acting outside her powers to claim that a van would be dispatched immediately if the WPO was not signed.

Sadly HMRC manual DMBM655710 et seq makes no reference to a judgment being necessary to start distraint action. For those who are interested DMBM655740 does state the following:

"Although you have an implied right under the legislation to enter the defaulter's premises to distrain on the defaulter's goods, you must not force your way in.

Once you are on the premises and have begun to levy distraint you are not obliged to leave. As long as you do not behave illegally, you are carrying out your statutory duty under TMA1970/S61, SSAA1992/S121A or FA1997/S51."

and goes on to say:

If you are unable to persuade the defaulter to invite you to enter the premises in the normal way, or you are refused entry, the higher debt management officer should consider whether a personal approach may persuade the defaulter to co-operate, or whether another means of enforcing payment would be preferable.

If this personal approach fails and

other means of enforcement are undesirable or impracticalyou are satisfied that sufficient assets do, beyond doubt, belong to the debtor and are on the premises concerned

the higher debt management officer should contact the Enforcement Technical Team, Shipley personally for advice.

So I think the moral to the story is that every time your restaurateur client charges for a meal make sure he puts 20% away for the VAT man and if business is not so good and he has spent the VAT money on wages and the roof over his head then, failing negotiation with the Collector of Taxes, don’t let the distraint officer through the door and then you can negotiate with a higher level manager.

 

 

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