Client had a HMRC debt management pitch up at their premises demanding an immediate payment for an outstanding tax. Neither client or me knew what it related to as no opportunity was given to check/verify/reconcile (not at clients premises but at own offices ) Client was threatened with assets being distrained if not paid immediately. It was implied that would happen instantaneously (No Court order, not a baillif) Both client and myself at a loss what this was about. We had an appeal against a surcharge which was pending and the surcharge notice was only last month.
There had been numerous errors by HMRC in the past such as allocating payments to the wrong account. Each received a letter of either dispute or request for explanation. ALL ignored but no further action. A VAT inspection last week passed with flying colours.
Despite my advise to the client that HMRC are not entitled to come and demand like that, client stressed as HMRC chap refused to go and kept threatening to distrain. We assumed it was the surcharge under appeal and I advised client we only had notification in late August to which replied and no response to date, not even a demand. The HMRC chap well kitted out with gadgets promptly printed a HMRC letter from his laptop with portable printer and gave it to us (today) demanding immediate payment.
This is wrong, wrong! I advised the client as such. However client much distressed phoned HMRC who admitted they had our letter and the HMRC inspector was not entitled to ask for money.
However the question is, and I am hoping for some of our legal eagles to answer;
Can HMRC just pitch with no notice to demand immediate payment? In cash or cheque. No opportunity given to check records as to what and how much, if any.
Can HMRC upon being told no demand letter was received print a demand letter on the spot dated same day and demand payment?
Can HMRC threaten distrainment when to my best knowledge only bailliffs can after a Court judgement?
Can our collective point me to reference material to consult (Trying to get a quick answer here instead of me trawling through manuals looking)
Many thanks
Replies (20)
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apalling behaviour - but all too common
Posted by richardterhorst
Can HMRC just pitch with no notice to demand immediate payment? In cash or cheque. No opportunity given to check records as to what and how much, if any.
Can HMRC upon being told no demand letter was received print a demand letter on the spot dated same day and demand payment?
Can HMRC threaten distrainment when to my best knowledge only bailliffs can after a Court judgement?
They rely upon peoples ignorance of the law and try to intimidate them into paying.
There are several offences and potential offences here.
Was this person from HMRC, or was it one of the muppets they are now employing from various debt collection companies? There have been several incidents reported of them falsely claiming to be from HMRC. That of course is a criminal act.Debt collectors (including HMRC) are NOT court bailiffs and have no powers to enter premises unless invited. If they refuse to leave when told to they are trespassers and can be removed by force.HMRC bailiffs are allowed to force an entry but ONLY with a magistrates warrant. These are very rare and you MUST be given an opportunity to contest it before it is issued (Article 6 HRA).If they continue to contact your client with demands there is the possibilty that they could be construed as committing an offence under the Protection from Harassment Act 1997. s40 of the Administration of Justice Act 1970 also protects debtors.
Regardless of the above it would appear that this collector acted in a reprehensible way and you should immediately file a formal complaint and insist on compensation for the distress and fear caused to your client.
Thanks
They rely upon peoples ignorance of the law and try to intimidate them into paying.
There are several offences and potential offences here.
Was this person from HMRC, or was it one of the muppets they are now employing from various debt collection companies? There have been several incidents reported of them falsely claiming to be from HMRC. That of course is a criminal act.Debt collectors (including HMRC) are NOT court bailiffs and have no powers to enter premises unless invited. If they refuse to leave when told to they are trespassers and can be removed by force.HMRC bailiffs are allowed to force an entry but ONLY with a magistrates warrant. These are very rare and you MUST be given an opportunity to contest it before it is issued (Article 6 HRA).If they continue to contact your client with demands there is the possibilty that they could be construed as committing an offence under the Protection from Harassment Act 1997. s40 of the Administration of Justice Act 1970 also protects debtors.
This is another one from this poster to print out and keep. Very useful indeed.
Thanks "Owain"!
Do you trust your client?
Whilst I can believe almost anything of HMRC, I also know for a fact that people often ignore letters issued by them and leave them to one side and claim they have never been contacted.
I would first request an copy of the initial notice, only if that could not be provided would I escalate this.
HMRC officers can distrain, http://www.hmrc.gov.uk/factsheets/ef1.pdf
I personally would check the facts of the case and then complain like hell.
Owain_Glyndwr is correct
Owain_Glyndwr sounds like the words of our missed Welsh contributer, who posted on a previous thread and on using this advise I have been passed up the HMRC chain of command arguing about distraint. I was arguing that HMRC had no right to threaten Distraint but I had to concede that they have the powers to issue Distraint proceedure and distrain goods but they conceded that they had no right of entry without a court order so could not distrain any goods unless invited in to do so.
I will continue advising clients that as long as they tell HMRC or their muppets to go away then they cannot take their goods.
As an aside HMRC also advise clients to take a bank loan - what gives them authority to financially advise my clients.
One of my clients had this happen to him
One of my clients rang in a panic with the same scenario. Before speaking to me my client made a time to pay agreement for the debt with the representative from HMRC to get rid of him. The chap from HMRC printed out letters showing the debt and payment plan but couldn't explain what the debt was for. The client brought the letters round and I rang the representative whose mobile number was on the letter. He admitted he didn't know what the debt was for because he was working for one of the debt collecting companies but the letters were headed HMRC and had the address of the DMU at Liverpool on. He couldn't access HMRC systems and told me to ring HMRC DMU - who didn't know either! Like other posters we never got to the bottom of it, rang round VAT, PAYE/CIS, self assessment but drew a complete blank. Never heard any more but didn't get an apology either.
You are not the only one
We have heard similar stories.
No you cannot bowl up and seize goods without notice. It seems to be the case that HMRC is using third party debt collection agencies, but the fact is that a lot of debtors will do anything possible not to pay, and if you are a collection agency you treat everyone as if they are going to do that.
If you are satisfied that it is not due then all you can do is send them home and write into HMRC. Yes, highly stressful for the client.
You might also consider Your Charter, you can write and complain.
Virtual Tax Support for accountants: www.rossmartin.co.uk
BBC/Pravda/News International
And here I thought that behaviour only occurred in Russia.
That's because you believe UK government propaganda.
New - Re Distraints
"Distraint is the act or process "whereby a person (the distrainor), traditionally even without prior court approval, seizes the personal property of another located upon the distrainor's land in satisfaction of a claim, as a pledge for performance of a duty, or in reparation of an injury." Barron's Law Dictionary
HMRC rarely actually seize the property, they will normally just list any assets of value which they will normally only seize at a later date if there is no attempt to make payments or reach agreement on repayments. They cannot "force" entry, but can enter the premises to cary out distraint.
There seems to be some confusion over appeals. Just making an appeal does not stop the debt being owed, until such time as any appeal decides it is not due. this is why you also have to request that any amounts owed are stood over. I beleive many fail to make such claims and think the appeal alone suffices.
Also if you are appealing against multiple decisions of which you accept some but not others, you can only request to stand over the debt of those decisions you are actually appealing and not the debt on those which you have agreed.
Getting confused
I thought that you said that the amount was not agreed with HMRC?
The answer in the context of what I think you are saying is that this is a SA or similar debt. HMRC may seize goods in lieu but only if there is a valid debt and after obtaining a court order.
I urge you to write back to HMRC and agree what if anything is outstanding..
Distraint and complaint
1. I still say "Go back to HMRC": if you have not agreed this amount and not received notification about it then something has evidently slipped in the system.
2. If the debt is actually due then HMRC may seize assets. It needs a court order if it wants to force entry though. I located this guide from TaxAid which takes a measured view: http://taxaid.org.uk/guides/tax-debt/enforcement-action
Not very reassuring!
I was looking on here for advice because HMRC have started demanding a large interest payment (from 3 years ago) but haven't been able to explain to us what it relates to.
The last correspondence we have from HMRC from 2008 is a letter saying that our account is completely clear and no interest is due.
The info on this thread about asking for the amount to be 'stood over' is very useful as they have started threatening to come round to the office to collect the debt.
However, it still looks like it could be quite unpleasant trying to get it all sorted out which, as an earlier comment says, is a bit sad.
Re Distraints
Alan Ferris' post Re Distraints is as I understand it.
I've been there a couple of times with clients and, fortunately, on their business premises at the time of a visit. There are some factors to be considered on distraint which can often make HMRC's or whoever's visit to distrain pointless and/or a waste of time.
The distrained items must not impede on the taxpayer's business/means to earn a living by their distraint and possible later removal
So, in simplistic terms, all office equipment and furniture, workers vans and tools, manufacturing equipment, and such items. Also anything leased or on HP is excluded.
That excludes most things at a place of business.
One big, scary item that someone could fall foul of is their car if it is not financed through the business and does not appear on the balance sheet. The taxpayer's personal car, paid for and sitting in the office or factory car park. Also, the personal iPad sitting on the desk could attract attention!
DISTRAINT aCTION
hi Guys
Just got off the phone to HMRC Debt Mangement Technical Office at Stoke Debt Technical Office as received a notice warning of enforcement by Distraint for £1,129.23.
Reading leaflet EF1 sounds really scarry. I was ready to pay by borrowing money off my wife's credit card. They charge a 1.5% fee on it if paing HMRC debt by Credit Card- interesting. It seems like a local office rathe than a call center where I rang uplast month and paid £200 and wanted to have a plan for 3/4Months but offer was rejected.
Just spoken to a nice lady who says that Distraint notice is to be ignored as it was only if I had not contacted this office today. Wonder why don't they say contact us directly rather than creating so much stress and anxiety!!
I wanted to £384/Month for 3 months. She told me that my appeal has been thrown out for late payment surcharge ( another story as I ticked the box in SA for the amount owing to be adjusted in 2012-13 Tax Code ) and submiited my online SA copy. Hence £74 has been added to account taking it to £1204.44. She suggested £302 over 4 months rather than 3 months. Is this really HMRC?. I didnot have to plead or beg? It seems like it all depends on whom u are talking to.
Hence my advice for those out there:
If you are contacted by DMB for outstanding Debt, and you contact them and they reject your payment offer, don't despair. Please write to HMRC and then they wil send it to a technical department, which would be a local office rather than a call center. With Call center my experience was talking to a brick wall.
Best of Luck and take action to a destrain notice. Please don't ignore it and dont get too stressed. Taxaid.org is a good resource as well as is this website.
Life is so much more interetsing with internet. I think internet is the most empowering tool for the masses. Best thing since French Revolution if one can say that. Just need more organisation which surely wil come with time. Sorry for my Banter
Best of Luck.