Every year, HM Revenue & Customs (HMRC) officers have to visit individuals and businesses to collect unpaid tax. Visits are undertaken by HMRC Field Force Collectors and can take place at a person’s home or business premises. Advance warning is always provided to warn the debtor that a visit may take place if a debt is not paid.
The objective of every visit is to collect unpaid tax. If the debt cannot be paid at the time of the visit, the HMRC Collector has the right to select goods from the home or business, list them on a C204 Distraint notice and inventory form and then arrange for an auctioneer to take them away.
The C204 lists:
- The type of tax due
- Any amount outstanding
- Any costs incurred and
- The inventory of goods listed.
The list could include:
- A car, van or lorry
- Office equipment
- Furniture and electrical items
- Personal belongings (individuals only)
The list will not include:
- Necessary tools of the trade, unless there are no other distrainable goods
- Household items, such as bedding and cooking equipment
- The home
- Items subject to a hire purchase agreement.
The Collector will ask the individual or business owner to sign the C204.
If the C204 is signed, the goods listed will remain with the owner. There is then a five day deadline for payment to be made, before possessions to the value of the debt are removed to be sold at auction.
If the C204 is not signed, the possessions will be removed there and then, but they will not be auctioned until the expiry of the five day deadline. If the possessions are auctioned for more than the amount owed (including any extra costs of removing and selling them), any balance will be repaid. If they are sold for less, HMRC will continue to pursue the balance outstanding.
From 13 August 2013 onwards, every individual or business visited by an HMRC Collector will be handed a factsheet.
The factsheet given to individuals and businesses in England, Wales and Northern Ireland can be viewed here:
The factsheet given to individuals and businesses in Scotland can be viewed here:
In order to prevent bogus callers pretending to be Collectors, HMRC has introduced a new Field Force Verification Helpline, so that individuals and businesses can check whether the Collector is genuine.
To access the helpline, the person being visited should:
- Ask to see the Collector’s photo ID
- Make a note of the ID number on the photo ID
- Call 0300 200 3862
- Provide HMRC with the ID number noted.
The HMRC officer answering the call will then be able to verify whether the Collector is genuine or not.
It should be remembered that these visits are usually a last resort. If an individual or business is having difficulty paying HMRC, it is always better to speak to HMRC as soon as possible.
Useful guidance is available on the HMRC website, which can be viewed here:
Author: Guy Smith, Senior Tax Consultant on the ReSource Tax and VAT Consultancy Team. E mail: firstname.lastname@example.org
E mail: email@example.com