HMRC ramps up distraint visits

HMRC is increasing its use of powers to seize the assets of late-paying businesses and damaging small firms, according to McGrigors

The number of occasions HMRC has used its powers to seize assets has quadrupled in just two years, rising to 7,004 in the twelve months to April 2011 from 1,675 cases two years ago, reported the tax specialists.  
 
The seized assets are typically sold off at ‘fire sale’ prices that fail to cover the amount of unpaid tax and reduce the chances of other creditors being repaid. 
 
Seizing the assets of businesses that might otherwise recover is driving many to insolvency and directly contradicts HMRC’s ‘Time To Pay' scheme, which aims to support small businesses through the negotiation of late payments, said McGrigors.
 
Seizing the assets of businesses that might otherwise recover is driving many to insolvency. The measures directly contradicts HMRC’s ‘Time To Pay scheme’, which aims to support small businesses through the negotiation of late payments, said McGrigors.

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Comments
ksagroup's picture

Yes we have noticed this

ksagroup | | Permalink

We are hearing of more and more instances where this is happening.  HMRC have lost their preferred creditor status so are ranked at the same level as trade creditors.  In effect they are unsecured creditors.  However, as any debt to HMRC is regarded as not in dispute they have other powers to collect their debt.  They can take possession of goods under a distraint notice without needing to go to court.

 

In any distraint action the bailiff cannot take "tools of the trade" as this would mean that the business is irrecoverably damaged.

 

Typo ...

mikewhit | | Permalink

"HMRC no longer recooperates the full unpaid taxes " - presumably "recovers" or "recoups" ?

Calling the bluff - forced to phoenix

mikewhit | | Permalink

They are also sending out letters saying that they will close the business down ("and freeze all bank accounts") within a week unless the payment is resolved in full.

This is leading to cases where the business owner is saying "fine, we cannot continue with these threats continually been sent out to us without any guarantee of time to pay - let's just continue our business eleswhere and let them close this down as they have promised"