With the light touch in respect of debt collection during the pandemic coming to an end, what can you now expect if HMRC comes knocking? How should you manage a visit from a field officer?
The “field force”
Now that the gloves are off in respect of debt collection, taxpayers are receiving unannounced visits from HMRC’s enforcement teams – the so-called field force. Enforcement officers are employed by HMRC and will carry appropriate identity cards. Bailiffs work for third parties engaged by HMRC to enforce debts on limited companies. High Court Enforcement Officers (HCEOs) are different from HMRC instructed bailiffs and have the power to enter a business premises to attempt to recover goods to the value of the debt and place these under a controlled goods agreement. The business then has a further seven days to pay the outstanding bill (to which an additional charge will have been added because of the enforcement action). If it fails to do so the HCEO will return to the premises to seize the goods and sell them at auction. HCEOs are not entitled to seize personal goods as the assets of the company are entirely separate from the personal assets of any employees or directors.
Unaware or incorrect?
Depending on who HMRC first comes into contact with at an employer’s premises it may be that the person concerned is totally unaware that the business owes any money. This can cause considerable reputational damage and embarrassment particularly as it often turns out that HMRC has incorrectly instructed the bailiffs/enforcement officers to enforce on a debt that doesn’t exist. So the main thing is to ensure that all reception staff understand that they should not panic and it may be an erroneous visit, but that a senior figure in the business should be notified immediately that the officials are on site. As bailiffs work for third parties instructed by HMRC, they may be unaware of any background to the issue as they have simply been asked to collect a debt. It often transpires that information has not been processed properly or payments correctly allocated by HMRC so there is no debt to enforce.
Who are they?
Whether the visit is from a field force officer or third party bailiff you should:
- ask to see their ID card to prove that they are from HMRC
- ask to see their enforcement agent certificate, ID card or badge
- check they are certified on the Ministry of Justice Bailiff register.
Your rights
Taxpayers are not obliged to let HMRC bailiffs into their business premises, unless they have a court order to that effect, and can simply ask them to leave a copy of the letter from HMRC’s Debt Management and Banking department which will set out the reasons for the visit. If the business has an accountant or tax advisor they should be alerted immediately that HMRC bailiffs or enforcement officers have arrived on site. If the official is already on site and has made themselves known to a member of staff they can still be asked to leave, there are no legal or financial repercussions in doing this.
Pro advice. If the business is big enough to have a customer compliance manager (CCM), they should be contacted immediately and asked to investigate. The officials are not entitled to take away any documentation without the employer’s consent and if they are permitted to take away documentation they must leave a receipt.
If the bailiffs or HMRC field officers arrive, it often transpires that the information they’ve been given is incorrect and there’s no debt due. So, check the paperwork carefully. Ask for valid ID and co-operate fully.
This article has been reproduced by kind permission of Indicator – FL Memo Ltd. For details of their tax-saving products please visit www.indicator-flm.co.uk or call 01233 653500.