HMRC out at client premises

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Client has outstanding VAT returns and HMRC came out regarding estimated charges last month.

Client has been getting VAT records gathered and sent us information on Saturday, client and HMRC woman called us today and the client advised that the HMRC agent had a sheet of paper and was writing down client assets and asked client to sign (client asked us should he and we said no as never heard of that happening - generally any HMRC debts be passed to debt collector then creditors liquadation etc.) We told the client not to as we never heard of that happening or aware of what it entails and he passed phone to HMRC who had a attitude about us telling the client not to, she said because we hadn't heard of it it wasn't true our response was that because we wern't aware of it we wouldn't advise a client to sign a form we haven't seen and that she has sprung on the client unannounced and that to send any documents that need signed via post to ourselves (appointed agent) and the client and give a appropriate time to resond, she then said she would discuss with client further.

 

Any thoughts or advise what they are actually doing?

Replies (17)

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By JB101
10th Apr 2024 11:57

"Client has outstanding VAT returns" - you're lucky, all my clients have ordinary ones!

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Replying to JB101:
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By johnward
10th Apr 2024 13:50

Definitely nothing outstanding about them!

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By wilcoskip
10th Apr 2024 12:02

This really heavy-handed approach is something we've seen a few times over the past couple of years. It hasn't been restricted to VAT, and the inspectors concerned were reasonable enough to schedule a call with us for later that same day and gave time to work out a payment plan.

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By Paul Crowley
10th Apr 2024 12:05

Sounds like bully tactics, but the client being that disorganised, really his own fault
Sounds more like a subcontract bailiff visit.
Did client see and copy the ID?

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By Tom+Cross
10th Apr 2024 12:12

You'd have thought that Mr Bates v The Post Office, would have been a learning curve, for these public "officials". Clearly not.
Monies due to HM Government etc, are of course due. There are ways of "communicating" what the expectations are, rather than this Captain Mainwaring approach

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By williams lester accountants
10th Apr 2024 12:47

johnward wrote:

Client has outstanding VAT returns and HMRC came out regarding estimated charges last month.

Client has been getting VAT records gathered and sent us information on Saturday, client and HMRC woman called us today and the client advised that the HMRC agent had a sheet of paper and was writing down client assets and asked client to sign (client asked us should he and we said no as never heard of that happening - generally any HMRC debts be passed to debt collector then creditors liquadation etc.) We told the client not to as we never heard of that happening or aware of what it entails and he passed phone to HMRC who had a attitude about us telling the client not to, she said because we hadn't heard of it it wasn't true our response was that because we wern't aware of it we wouldn't advise a client to sign a form we haven't seen and that she has sprung on the client unannounced and that to send any documents that need signed via post to ourselves (appointed agent) and the client and give a appropriate time to resond, she then said she would discuss with client further.

 

Any thoughts or advise what they are actually doing?

I would assume this is a Controlled Goods Agreement where the bailiff is taking control of assets which they can sell at auction at a future point should the client not pay the VAT due. This used to be called 'Walking Possession'.

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Replying to williams lester accountants:
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By Paul Crowley
10th Apr 2024 12:55

Agree
List of assets is the clear indicator

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Replying to williams lester accountants:
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By johnward
10th Apr 2024 13:03

are individuals from HMRC baliffs?

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Replying to williams lester accountants:
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By tom123
10th Apr 2024 13:16

I joined a company once, and bailiffs turned up on my second day. Very heavy overcoats (on quite large chaps) in July.

I agree - walking possession - although I think from memory I assumed it was "walk in"..

Anyway, somehow directors found the funds shortly after.

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By rmillaree
10th Apr 2024 15:09

strange set up responses here

i applaud hmrc for having no nmonsense attitude with multiple vat retrurns being o/s - if client cant be bothered to meet their obligations and quantfiy what is owed what do they expect. its complete no brainer for them to be acting balshy based on conduct of buisnes onwers .

the middle ground here is to speak to baliff type person - humbly apologies satisfy them returns will be submitted super pronto and that payment plan will be setup and they will be updated as appropriate.

well done hmrc for not fiddling while rome burns for once.

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Replying to rmillaree:
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By nrw2
10th Apr 2024 17:05

Agreed. Fail to meet your compliance obligations or pay your tax and us taxpayers should be protected accordingly.

As a complaint tax payer I'd far rather see fair enforcement for non-compliance than lenience like the bounce back loans write-off debacle. Non-payment has to be discouraged.

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VAT
By Jason Croke
10th Apr 2024 15:13

I've seen this sort of thing before, used to be more often pre COVID, nothing for a while after and now starting to see it again.

HMRC use a mix of their own in-house debt collection team and outsourcing to third party agents. The HMRC officers can be polite but also brutally focused on their mission, which is to collect outstanding debts.

Client hasn't paid any VAT, bet they are still charging VAT to customers and keeping it to finance their business, so HMRC aren't going to be nice about this. It is meant to be shocking and forceful, they're debt collectors!

Also remember that HMRC have quite significant powers of entry to personal and business premises.

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Replying to Jason Croke:
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By FactChecker
10th Apr 2024 16:37

"Also remember that HMRC have quite significant powers of entry to personal and business premises" = never fully lost all those old Customs 'right of entry' powers!

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VAT
By Jason Croke
11th Apr 2024 09:31

https://www.gov.uk/hmrc-internal-manuals/debt-management-and-banking/dmb...

OP - Your client may have got off lightly, under HMRC's power they could have removed or seize all of the listed assets there and then if the client refuses to sign the asset list.

Just be careful OP that in trying to help your client, you may be advising them the wrong course of action. Having refused to sign the agreement, HMRC can return within 7 days to take full possession of those goods. If the client tries to sell or dispose of those assets, that is a criminal offence. I'm not sure of the consequences if you try to liquidate the company when there is a possession order against the company assets.

This is more a legal matter than an accounting issue. Perhaps refer your client to an insolvency expert or better still, get them to pay their VAT liabilities under a time to pay agreement.

Also remember that in certain circumstances, HMRC can issue personal liability notices which makes the individual Director responsible for any VAT debts, so liquidating the company may simply shift the VAT debt onto the individual.

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Replying to Jason Croke:
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By I'msorryIhaven'taclue
11th Apr 2024 09:58

Jason Croke wrote:

I'm not sure of the consequences if you try to liquidate the company when there is a possession order against the company assets.

Given the company assets would revert to the Crown upon liquidation, His Majesty's Revenue & Customs could always pursue His Majesty for them ;)

Jason Croke wrote:

Also remember that in certain circumstances, HMRC can issue personal liability notices which makes the individual Director responsible for any VAT debts, so liquidating the company may simply shift the VAT debt onto the individual.

That alone is surely reason enough to advise the client not to sign. At least not until a grown-up has examined the document - who knows what else is in the fine print! And even on the question of assets and stocks there can be ownership issues beyond the everyday comprehension of a put-on-the-spot client: hire purchase & lease; sale or return stock; Romalpa clauses; ascertained goods... HMRC are attempting to by-pass the client's agent(s) by twisting his arm for a signature on-the-spot. Brownshirt tactics!

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By bernard michael
11th Apr 2024 09:59

How many VAT returns are outstanding and have HMRC been sending letters your client hasn't shown you??
This collection behaviour tends to happen for long outstanding non performance and HMRC being ignored, which they don't like

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Replying to bernard michael:
VAT
By Jason Croke
11th Apr 2024 10:28

+1

HMRC do not like being ignored (shame HMRC ignore tax agents and taxpayers when they have urgent queries).

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