Detailed information on rights and powers of HMRC bailiffs (or enforcement officers) including their ability to enter premises, seize assets, and negotiate payment plans.
When Can an HMRC Enforcement Officer Visit Your Business?
HMRC bailiffs have the authority to visit business premises[1]Trusted Source – Parliament – Bailiffs under specific conditions: typically outstanding tax debts, such as unpaid Corporation Tax, PAYE, or VAT.
This usually occurs after a Notice of Enforcement has been issued, giving the business owner seven days’ notice. This notice will usually be sent via post or delivered in person, detailing the reason for the visit and the amount of tax owed.
The powers to enter premises are granted under the Taking Control of Goods Regulations 2013, which allows enforcement agents to enter a property to seize goods if court permission has been obtained.
While both roles aim to recover unpaid taxes, an HMRC enforcement officer is an employee of HMRC and has different legal powers compared to a bailiff, who may be a third-party contractor.
What Powers Do Enforcement Officers Have?
One of the primary powers of enforcement officers is the ability to seize goods and assets from the business premises to settle the tax debt. This can include equipment, machinery, vehicles, and inventory. However, they must first obtain a warrant from a magistrate’s court before removing any goods. They are also prohibited from seizing essential items, such as tools of the trade or goods belonging to third parties.
Enforcement officers can also enter into a Controlled Goods Agreement (CGA) with the business, which allows the company to keep possession of the seized goods while making payments towards the debt. If the terms of the CGA are breached, the officers have the power to re-enter the premises and remove the goods without further notice.
These officers also have the authority to obtain information about the company’s assets and finances from third parties, such as banks, customers, and suppliers. They may also request a company director to provide information about the business’s assets and liabilities.
Your Rights Against HMRC Bailiff Actions
Every HMRC bailiff must carry an identity card and a letter of authorisation from HMRC. Business owners should request to see these upon the bailiff’s arrival to verify their credentials. This is important to ensure that the actions taken are lawful and within the scope of granted authority.
Enforcement officers are not permitted to use force or enter private residential areas of the business premises without a court warrant. They must also respect the rights of the business and its employees, and cannot threaten or intimidate anyone during the course of their duties.
If an enforcement officer does overstep their authority or fails to follow proper procedures, the business may have grounds to challenge their actions and seek legal recourse.
Steps to Take if Unlawful Seizure Occurs
If you believe that an HMRC bailiff has seized goods unlawfully, you should immediately contact HMRC to dispute the action. Documentation proving the ownership and status of the goods can aid your case. Legal advice may also be sought to ensure proper representation and to protect your business’s interests.
Help & Advice with HMRC Enforcement
Dealing with HMRC enforcement actions can be a stressful and challenging experience for any business owner. However, it’s important to remember that you’re not alone in this process.
Our team of experts has extensive experience in dealing with HMRC enforcement and can offer tailored guidance based on your specific circumstances. Whether you need assistance in negotiating a payment plan, understanding your rights and obligations, or exploring alternative options such as company voluntary arrangements or liquidation, we’re here to help.
Use the live chat feature on our website during working hours to connect with one of our knowledgeable advisors, or call us directly on 0800 074 6757.
FAQs
What should I do if I receive a Notice of Enforcement from HMRC?
If you receive a Notice of Enforcement from HMRC, it’s important to act quickly. Review the notice to understand the debt amount and the deadline by which you must pay. If you can, pay the debt in full to avoid further action. If payment in full is not possible, contact HMRC immediately to discuss possible payment arrangements or seek advice from a financial advisor or insolvency practitioner.
What are my rights if HMRC bailiffs visit outside of business hours?
HMRC bailiffs are generally required to visit during reasonable hours, typically defined as 6am to 9pm. If a bailiff visits outside these hours without a justified reason, they may be in violation of their conduct rules. You can refuse entry and should report the incident to HMRC’s complaint department.
How can I prevent HMRC bailiffs from seizing personal assets?
To prevent HMRC bailiffs from seizing personal assets, ensure that personal and business assets are clearly separated and properly documented. Keep invoices and proof of ownership that clearly show which assets are personal. Inform the bailiffs of these distinctions during their visit. Personal assets should not be kept on business premises if possible.
What options do I have if I cannot pay my tax debt before the HMRC visit?
If you cannot pay your tax debt before the HMRC visit, contact HMRC to negotiate a payment plan. This may involve setting up an installment agreement that allows you to pay the debt over time. Alternatively, seeking advice from a financial advisor or insolvency practitioner can provide other strategies to manage the debt.
Can HMRC bailiffs take goods that are on the business premises but owned by someone else?
No, HMRC bailiffs cannot legally seize goods that do not belong to the business. This includes items that are leased, hired, or owned by other individuals. If there is a risk of incorrect seizure, provide proof of ownership or rental agreements to the bailiffs during their visit.
What is a Controlled Goods Agreement, and how does it affect what HMRC can seize?
A Controlled Goods Agreement is a legal document that an HMRC bailiff may use to take control of goods while leaving them in the possession of the debtor. It lists the items that may be seized if the debt is not paid within an agreed period, typically seven days. Signing this document prevents the immediate removal of these goods but allows their seizure if the agreement’s terms are not met.
How long does it take for seized goods to be sold at auction?
After goods are seized, HMRC typically sells them at public auction within a few weeks to a few months, depending on the nature of the goods and the logistical arrangements. The proceeds are used to cover the outstanding tax debt, with any surplus returned to the business or individual.
What should I do if I disagree with the valuation of seized goods?
If you disagree with the valuation of seized goods, you can challenge the appraisal by providing evidence of the items’ higher value, such as recent purchase receipts or independent valuations. You should contact HMRC directly to discuss the valuation and submit your evidence.
Can HMRC bailiffs access locked areas within my business premises?
HMRC bailiffs can access locked areas within business premises if they have legal authorization and believe that assets covering the debt are stored there. They are allowed to use reasonable force to enter these areas if necessary. Always ensure that any entry is legally justified and documented.
What are the consequences if I obstruct an HMRC bailiff during their duty?
Obstructing an HMRC bailiff can lead to serious legal consequences, including additional fines or charges. If you obstruct a bailiff without a lawful reason, you may be found in contempt of court. It is essential to cooperate with HMRC bailiffs while asserting your rights within legal boundaries.
References
The primary sources for this article are listed below, including the relevant laws and Acts which provide their legal basis.
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