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
Replies (15)
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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
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.
Have a look at this thread
https://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.
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.
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.
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.
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.
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.
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.