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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (EU States): requests for recovery received from other member states - debtor not resident

Where a debtor is not resident in the UK, it may still be possible to take action to recover the debt if the debtor:

  • owns land or property that is in England or Wales
  • is employed by a business who is established in England or Wales
  • owns property in Scotland.
     

No UK recovery action is possible in the UK if the:

  • assets are in Northern Ireland
  • debtor is employed by a business established in Northern Ireland
  • debtor has assets other than land or property in England or Wales
  • debtor is working in England or Wales on a self employed basis.
     

International Debt Unit, MARD team action {#}

Consider whether any UK recovery action is possible.

UK recovery action possible

Send a completed MARD2A SEES letter and the Uniform Instrument Permitting Enforcement to the debtor at their overseas address. BF for 35 days to await payment.

If the debtor fails to respond to the request for payment, consider the next appropriate recovery action.

If the debtor has land or property in England or Wales and:

  • the land or property is owned solely or jointly
  • there is a realistic prospect that, after payment of all fees and costs and clearance of any mortgage or loan secured on the land or property, there will be sufficient net proceeds of sale to cover all or most of the debt. Where the land or property is jointly owned, you must consider only the debtor’s share of the proceeds
  • the land or property is not expected to be sold for at least 30 days
     

issue the appropriate enforcement warning letter and fact sheet to the debtor at their overseas address. If the debtor still fails to respond, refer the debt to EIS Bradford using the agreed referral process. Ask them to start a county court action, obtain a judgment for the debt and then enforce the judgment by placing a charge on the land or property.

If the debtor is employed by a business established in England or Wales and:

  • the debtor is in receipt of income subject to PAYE
  • the earnings from a single employer are sufficient, taking into account the amount of earnings that are protected (see DMBM667560 on how to calculate the proportion of earnings that is protected)
     

issue the appropriate enforcement warning letter and fact sheet to the debtor at their overseas address. If the debtor still fails to respond, refer the debt to EIS Bradford using the agreed referral process. Ask them to obtain a judgment for the debt and then enforce the judgment by applying for an attachment of earnings order.(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If the debtor has a property in Scotland, issue the appropriate enforcement warning letter and fact sheet to the debtor at their overseas address. If the debtor still fails to respond, refer the debt to the Edinburgh Debt Management team using the agreed referral process. Ensure you highlight the date by which legal action must be commenced.

UK recovery action not possible

If UK recovery action is not possible:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000) explain why no further UK recovery action is possible
  • send the updated e-form to the applicant state(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • close the case.
     

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{#IDACWNNF}EIS Bradford action {#}

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

You must be able to satisfy the court that service has been made. A claim form must be served within four months from the date of issue.

Once judgment has been entered:

  • apply for a charging order or attachment to earnings as appropriate
  • update the International Debt Unit, MARD team with the action you have taken.
     

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Edinburgh {#IDA3WNNF}Summary Warrant team action {#}

Where the debtor owns property in Scotland commence an action appropriate to the size of the debt (Small Claim, Summary Cause or Ordinary Cause). Ownership of heritable property should be your ground of jurisdiction and you should arrange to register an inhibition on the dependence of the action. (This content has been withheld because of exemptions in the Freedom of Information Act 2000) Once the decree has been obtained, update the International Debt Unit, MARD team with the action taken.