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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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DMBM560193 – Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (EU States): requests for reimbursement of costs

General

Normally, the requested member state will not charge the applicant member state costs for taking a recovery action.  However, where the requested member state has incurred recovery costs for a tax or duty debt, such as court costs, but has been unable to recover these costs from the debtor, it may deduct any outstanding costs from any payments it has recovered and only remit the balance to the applicant member state.

In addition, where either:

  • recovery poses a specific problem, concerns a very large amount of costs or relates to organised crime
  • recovery action is deemed unfounded
     

both member states may agree for the applicant member state to pay the recovery costs/losses of the requested member state, if they can’t be recovered from the debtor.

Recovery poses a specific problem, concerns a very large amount in costs or relates to organised crime

A requested member state can ask the applicant member state to agree to reimburse these costs if they cannot be recovered from the debtor.  It should seek to get this agreement before the costs are incurred.

Requests to other member states

Send an updated e-form to the applicant member state. Provide details of the recovery action proposed (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and the estimated costs and losses that could be incurred if proposed recovery action was taken.

  • If the applicant member state accepts liability to reimburse these costs and losses, proceed with the suggested recovery action.  Once all costs and losses incurred are confirmed, update the applicant member state and ask them to reimburse this amount.
  • If the applicant member state doesn’t accept liability to reimburse these costs and losses, send them an updated e-form explaining that no further recovery action is possible and close your case.
     

Requests from other member states

If you think we should not agree to reimburse these costs and losses, respond to their request advising that we don’t accept liability to reimburse them.

If you think that we should agree to reimburse these costs and losses, discuss the case with MIPS first. MIPS will review the case and liaise with Finance as appropriate.  They will also provide you with instructions on how to proceed.

Action deemed to be unfounded

A requested member state can ask the applicant member state to reimburse costs incurred where the claim or the IPE were later found to be invalid.

Action is not considered unfounded, however, where claims were valid when the request was made but only after the receipt of new information from the debtor, prove to be unfounded.

Requests to other member states

Send an updated e-form to the applicant member state requesting reimbursement of costs and losses.  Explain why you consider the action was unfounded.

Requests from other member states

The applicant member state will explain why they consider the action was unfounded.

If you think the action was not unfounded, respond to their request advising that we don’t accept liability to reimburse their costs. Explain why the action was not unfounded.  You may wish to discuss the case with MIPS before you respond.

If you think that the action was unfounded, discuss the case with MIPS first. MIPS will review the case and liaise (This content has been withheld because of exemptions in the Freedom of Information Act 2000) as appropriate.  They will also provide you with instructions on how to proceed.