With almost four decades of experience in business, Mike Smith is one of the founders of Company Debt and one of the UK’s most experienced mediators with HMRC.
Having previously owned several of his own successful companies and occupied senior roles as a director within both Legal and General and Sun Alliance during separate periods of his career, Mike founded Company Debt with a genuine desire to help stressed directors in challenging circumstances. He is also an expert in the alternative finance sector.
If a Notice of Enforcement drops onto your desk, or worse, an HMRC-appointed enforcement agent is already outside, the clock is ticking. You have seven clear days to act before the agent can legally take control of company assets. That prospect can freeze any director, but panic helps HMRC, not you.
This guide cuts through the fear, explains exactly what enforcement agents can and cannot do, and sets out the quickest, safest responses to protect cash flow, equipment and your own position.
A Notice of Enforcement triggers a strict timetable. You receive seven clear days to act before an enforcement agent can attend. Miss that window and, within days, trading assets can be listed, controlled and ultimately removed for sale.
Day 0: Notice of Enforcement served, £75 compliance fee added.
Day 1–6: Decision time, pay, agree Time to Pay, or seek insolvency advice.
Day 7: Enforcement visit possible, agent may attend during business hours, add a £235 fee plus 7.5 per cent of any debt over £1,500, and invite you to sign a Controlled Goods Agreement (CGA).
After visit: If a CGA is not agreed, or later breached, goods may be removed and a further £110 plus 7.5 per cent fee can apply.
Immediate escape routes:
Pay in full (stops further enforcement action, but fees already triggered still apply).
Negotiate a realistic Time to Pay that includes enforcement charges.
Enter a formal insolvency process where appropriate, which may restrict or pause enforcement depending on the procedure.
Fees escalate at each stage, so delay quickly becomes the most expensive option.
Why HMRC Uses Bailiffs for Unpaid Tax
HMRC uses enforcement agents because Parliament has granted it the power to recover tax without first obtaining a court judgment.
This authority comes from Section 127 of the Finance Act 2008 and is exercised through Schedule 12 of the Tribunals, Courts and Enforcement Act 2007 (Taking Control of Goods).
HMRC can issue a Notice of Enforcement directly once tax is overdue.
Enforcement agents must follow statutory rules and fee structures.
HMRC officers themselves can act as enforcement agents without certification.
Key Risks of Ignoring or Delaying Action
Ignoring a Notice of Enforcement can escalate quickly from a warning into asset seizure.
Risk checklist
Compounding fees: £75, then £235 plus 7.5 per cent, then £110 plus 7.5 per cent.
Low sale values: Assets may be sold below market value, leaving residual debt.
Loss of control: Once goods are taken into control, your options narrow sharply.
Director exposure: Continuing to trade when there is no reasonable prospect of avoiding insolvent liquidation can lead to personal liability.
Reputational damage: Visits can affect supplier and customer confidence.
Common mistake to avoid
Do not let unprepared staff deal with enforcement agents. Anyone with apparent authority may be treated as authorised to engage.
Notice of Enforcement: Your Seven-Day Warning
If you ignore a Notice of Enforcement, an enforcement agent can attend your premises after the statutory notice period. Acting early can prevent escalation.
What the Notice Must Show
The total tax, interest and £75 compliance fee
HMRC as creditor and agent contact details
Payment instructions and the earliest attendance date
Counting the Seven Clear Days
The period excludes the day of service, Sundays and bank holidays. The earliest visit is after those seven clear days expire.
Day 0: Notice Served
The £75 compliance fee is triggered. Begin reviewing finances immediately.
Day 1–6: Options Open
Pay in full
Propose a Time to Pay arrangement
Seek professional advice
Day 7+: Visit Possible
From the first eligible day, an enforcement agent may attend without further warning.
What Happens During an HMRC Bailiff Visit
An enforcement agent will attend, identify themselves and seek peaceful entry.
Peaceable Entry
Entry must be through normal means (for example, an unlocked door).
They cannot force entry on the first visit without a court-issued warrant.
If goods are later taken into control and terms are breached, they may seek authority to re-enter using force.
Dealing with “Apparent Authority” Staff
Agents may deal with anyone appearing to be in charge.
A staff member’s agreement can bind the company.
Always escalate to a director or authorised officer.
When a Warrant Can Be Sought
If entry is refused, HMRC can apply to the court for authority to use reasonable force.
This significantly escalates the situation and costs.
Controlled Goods Agreement: Binding Your Assets
A Controlled Goods Agreement (CGA) allows goods to remain on-site but places them under legal control.
A CGA:
Lists goods taken into control
May include a repayment arrangement
Prevents disposal or interference with listed items
Interfering with goods once they are under control can amount to a criminal offence.
If a CGA is breached:
Enforcement can resume
Agents may give notice and return to remove goods
Additional fees apply
Director Checklist Before Signing
Ensure a director or authorised officer signs
Verify ownership of listed items
Check valuations and descriptions
Confirm repayment terms are realistic
Seek advice before agreeing
Assets Bailiffs Can and Cannot Seize
Seizable (owned outright)
Typically exempt
Stock, equipment, machinery
Items not owned by the business
Company vehicles
Goods on hire purchase or lease (if title not passed)
Office furniture and IT
Third-party property
Cash and finished goods
Essential personal tools of trade (subject to limits and conditions)
Key points:
Ownership is critical; proof must be available.
Goods not owned by the company should not be taken, but evidence is required.
Once goods are under control, interference carries legal risk.
The True Cost: Bailiff Fees and Payment Order
Stage
When applied
Fixed fee
Percentage
Compliance
Notice issued
£75
–
Enforcement
First attendance
£235
7.5% over £1,500
Sale
Removal stage
£110
7.5% over £1,500
Fees are applied before reducing the underlying tax debt.
How to Stop or Mitigate Enforcement
Pay in full – Stops further enforcement, but existing fees remain payable.
Time to Pay arrangement – May suspend action if agreed and maintained.
Formal insolvency process – Certain procedures can restrict or pause enforcement.
Challenge or complaint – Can address errors, but does not automatically stop enforcement.
Director Duties and Personal Exposure
A bailiff visit is often a warning sign of deeper financial distress.
Directors must:
Monitor solvency carefully
Avoid worsening creditor positions
Seek advice where insolvency is likely
Wrongful trading risk arises where there is no reasonable prospect of avoiding insolvent liquidation and directors fail to minimise losses.
Scotland and Northern Ireland: Different Enforcement Rules
Aspect
England & Wales
Scotland
Northern Ireland
Procedure
Taking Control of Goods
Summary Warrant + Charge for Payment
Distraint
Notice
7 clear days
14 days after charge
HMRC will warn before action
Officer
Enforcement Agent
Sheriff Officer
HMRC Officer
Common Misunderstandings Cleared Up
❌ Myth: Bailiffs can force entry immediately.
✅ Fact: Entry must be peaceable unless a court authorises otherwise.
❌ Myth: HMRC needs a court judgment.
✅ Fact: HMRC can enforce without a CCJ.
❌ Myth: Partial payments reduce tax first.
✅ Fact: Payments are applied to fees first.
❌Myth: Only directors can sign agreements.
✅ Fact: Apparent authority can bind the company.
FAQs
1) Can HMRC take goods on finance?
Generally no, if ownership has not passed. Evidence must be provided.
2) What if the premises are locked?
Agents may return and enforcement continues. HMRC may seek court authority if access is repeatedly refused.
3) Can HMRC seize company assets for personal tax debts?
No, enforcement is against the debtor named.
4) How long is a Notice valid?
Typically up to 12 months for enforcement action.
5) Do bailiffs need ID?
Yes, they must show identification and authority.
6) Can I move goods before a visit?
Moving goods to avoid enforcement may lead to accelerated action or court intervention.
7) Does administration stop bailiffs?
Certain insolvency procedures can restrict enforcement, subject to legal rules.
8) Are vehicles at risk?
Yes, especially if owned by the business.
9) Can I agree payment after a visit?
You may still negotiate, but enforcement continues unless agreed.
10) What if staff sign a CGA?
It can still bind the company.
11) Is interest still charged?
Yes, tax interest continues until the debt is cleared.
12) Can HMRC take related company assets?
No, unless ownership is proven otherwise.
One Clear Next Step for Company Directors
Speak to a licensed insolvency practitioner as soon as the Notice of Enforcement arrives.
Early advice can:
Assess whether a Time to Pay plan is viable
Explain options to stabilise the business
Help protect essential assets
Act early. Once enforcement escalates, control and options reduce quickly.
