HMRC demanding payment without notice

HMRC demanding payment without notice

Didn't find your answer?

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)

Please login or register to join the discussion.

By Owain_Glyndwr
29th Sep 2011 15:04

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 (2)
Replying to User deleted:
Me!
By nigelburge
30th Sep 2011 11:02

Thanks

Owain_Glyndwr wrote:

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"!

 

Thanks (0)
Replying to User deleted:
avatar
By richardterhorst
30th Sep 2011 11:39

Bogus HMRC ID? Possible.

I did not sight the ID but client says he had HMRC ID, but after your comment may be not proper ID. Interesting HMRC acknowledged appeal there but he did not know. Pity no photocopy of ID taken or me being there (I am not intimidated by HMRC)

HMRC seems to ignore law and get away with it. One law for us and one for them it seems.

What upset me is that the client was not given an opportunity to check what about, verify amount and reconcile and this with an appeal in the pipeline. Harassment is the right word.

Thanks (0)
avatar
By Alan Ferris
30th Sep 2011 08:37

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.

 

 

Thanks (0)
Replying to User deleted:
avatar
By richardterhorst
30th Sep 2011 11:32

Facts know but HMRC acting unlawfull.

No the issue was only a month old and an appeal lodged. As in weekly contact with client with well trained staff know I always get HMRC stuff same or next day.

No demand was issued untill he produced one there and then. I had the orginal notice hence appealed.

As an accountant I would never, ever pay a HMRC person direct. Its post to known address or BACS. Doing anything else is stupid.

HMRC can commence distrain action but only a Court can judge and then a bailiff is the one that actions the distraining. Unless new laws have been passed putting HMRC outside of ordinary law with special powers reserved to the Courts? Doubt that but then there seems to be one rule for law abiding citizen and another for politicians and civil servants.

 

Thanks (0)
Replying to User deleted:
avatar
By richardterhorst
30th Sep 2011 11:46

Yes I trust the clients but not HMRC

Hence me being upset, especially as they are clients who try to do the right thing always. Very law abiding.

Pity HMRC is not!!

Thanks (0)
avatar
By bduncan
30th Sep 2011 09:33

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.

 

Thanks (0)
avatar
By lesley.barnes
30th Sep 2011 10:17

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.

Thanks (0)
avatar
By eddies368
03rd Oct 2011 12:17

Owain.....

[Removed by mod - discussion of banned members.]

Thanks (0)
Replying to Flying Scotsman:
avatar
By chatman
03rd Oct 2011 13:39

C_D

[Removed by mod - discussion of banned members.]

Thanks (1)
Nichola Ross Martin
By Nichola Ross Martin
03rd Oct 2011 12:35

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

Thanks (1)
avatar
By richardterhorst
03rd Oct 2011 13:30

Alan re distraints, surely the fact sheet is not right?

Finally got to read the fact sheet which does confirm  HMRC can seize.

I am thoroughly confused. I always believed only a Court order allows seizure of goods. Also that a debt collector is NOT an agent of HMRC, Just a supplier of services.

The way the fact sheets reads, any HMRC inspector in a foul mood can ignore appeals and pitch up at your premises and without prior demands just distrain and per fact sheet seize the goods.

By implication they can force entry. All without a Court order. Where is the rule of law here????

Can one of our legal commentators maybe comment? With HMRC targetting the soft targets, namely law abiding SME's this is important.

And here I thought that behaviour only occurred in Russia.

Thanks (0)
Replying to davidwinch:
avatar
By chatman
03rd Oct 2011 13:42

BBC/Pravda/News International

richardterhorst wrote:
And here I thought that behaviour only occurred in Russia.

That's because you believe UK government propaganda.

Thanks (0)
Replying to davidwinch:
avatar
By Alan Ferris
10th Oct 2011 12:07

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.

Thanks (1)
Nichola Ross Martin
By Nichola Ross Martin
03rd Oct 2011 13:41

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..

Thanks (0)
Nichola Ross Martin
By Nichola Ross Martin
03rd Oct 2011 15:02

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

Thanks (0)
Replying to ShirleyM:
avatar
By richardterhorst
03rd Oct 2011 16:49

The link made sad reading

Thanks Nichola

Read the link and the fact that an HMRC inspector can seize without a Court order. But unlikely to do so. I suppose if they feel the power and are inclined to be nice they won't.

That is exceptionally worrying as you are totally reliant on someone being in a good mood. No the debt was not agreed. No it was a VAT surcharge (Ltd company). It was one month from initial notice and an appeal had been lodged (waiting on their response)

So in this scenario an inspector does not know an appeal was lodged (admitted) was on the premises without forcing as that was the only way to get to the admin office and if he did not like you, his breakfast did not sit well, can just seize goods. He certainly threatened and only backed off when told by HMRC that an appeal was being processed. He certainly was on the point to list the assets on a distrain order.

A system which relies on the good nature and/or common sense of a tax collector is wrong, wrong! And with HMRC inefficiency often things "slip the system" Hence one has laws to protect one but sadly lacking here. Fortunately we got through to HMRC by telephone. Imagine if we were kept waiting (normal) or got the run around (common)

Well nice to know they have that much power based on how they feel. And here I came from a 3rd world country where that is not allowed without a Court order.

You live and learn but just lost a lot of incentive to make the system work. Maybe move to Greece.

I feel sorry for my and other law abiding client(s)

Thanks (0)
avatar
By Fraser8
18th Jan 2012 16:16

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.

 

 

Thanks (0)
avatar
By adder1
03rd Feb 2012 17:57

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!

 

Thanks (0)
avatar
By drjaffery
25th Jul 2012 12:27

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.

Thanks (0)