Managing an HMRC inspection

HMRC is no longer using its light touch when it comes to debt collection during the pandemic фтв HMRC inspection, What will you now experience if HMRC knocks on your door? How should you handle a visit from a field officer?

  • The “field force”

In the wake of removing the gloves from debt collection, HMRC’s enforcement teams – the so-called field force – are now visiting taxpayers without warning with HMRC inspection. Enforcement officers are employed by HMRC and will carry HMRC ID cards. Bailiffs are third parties employed by HMRC to enforce debts against limited companies. HCEOs (High Court Enforcement officers) are different than bailiffs on behalf of HMRC and have the power to enter a business premises in order to recover goods at the value of the debt and place these under a controlled goods agreement. Business will then have an additional seven days to pay the outstanding bill (which will be subject to an additional charge due to the enforcement action). In failing to do so, the HCEO will return to the premises to take possession of the goods and sell them at auction. A HCE is not permitted to seize personal property the assets of a company are entirely separate from the assets of any employees or directors.

 Unaware or incorrect?

When HMRC first contacts an employer at their premises with HMRC inspection, it may be the person concerned who is totally unaware that the business owes anything. It is particularly embarrassing when it turns out that HMRC has incorrectly instructed the bailiffs/enforcement officers to enforce a debt that does not exist. As a result, it is vital that receptionists understand that it may be an erroneous visit, but that a senior figure in the business should be notified immediately when the officials arrive. Since bailiffs work as third parties instructed by HMRC, they may be unaware of the background to the issue, as they have only been asked to collect a debt. Often, information has not been processed correctly or payments have not been allocated correctly by HMRC, so no debt can be enforced.

Who are they?

You should follow these steps whether an officer from the field force or the bailiff from a third party:

    • 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

Unless a court order is in place, taxpayers are not required to let HMRC bailiffs into their premises. Instead, they can ask the bailiffs to leave a copy of the letter from HMRC’s Debt Management and Banking department that explains the reason for the visit. Accountants and tax advisors should be alerted as soon as HMRC bailiffs or enforcement officers arrive on the premises. Despite the fact that the official is already on site and is known to a member of staff, they can still be asked to leave, there are no legal or financial repercussions to doing so.

Pro advice. If the business has a customer compliance manager (CCM), they should be contacted right away and asked to investigate the matter.  Find out more how HMRC works with large businesses. Unless the employer consents, the officials cannot remove any documentation without the employer’s permission, and they must leave a receipt if they are permitted to do so.

In many cases, when bailiffs or HMRC field officers arrive, the information they’ve been given is inaccurate, and there is no debt owed. Carefully examine all paperwork. Ask for valid identification and cooperate fully.

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