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HMRC internal manual

Debt Management and Banking Manual

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HM Revenue & Customs
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Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (non-EU countries): scope of the MARD provisions

Countries outside the EU which have ratified the CoE/OECD Convention with which the UK has an MOU/MOA

Norway, Iceland and the Faroes.

Countries with which the UK has a DTA containing debt recovery provisions and an MOU/MOA

New Zealand, the Faroes and South Africa.

Additional countries

As and when additional countries either ratify the CoE/OECD Convention or include mutual recovery assistance in bilateral international agreements with the UK, this guidance will be updated.

Which taxes and duties are covered?

Customs duties are excluded, as are social security contributions (NICs) and tax credits. However, all other UK national taxes and duties are within the scope of these agreements.

More information

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

Types of request

There are four different types of request.

Requests for Action required
   
Information Checking addresses, details of employment and assets of the debtor, a person liable to settle the claim or a third party holding assets, and establishing if further action is cost effective.
Notification Arranging for the service of legal documents.
Recovery Pursuing payment from the debtor, a person liable to settle the claim or a third party holding assets, using normal recovery procedures.
Precautionary measures Protecting a claim that is not yet due by for example seizing assets or freezing bank accounts.

Requests for information

Requests for information relating to recovering tax debts are handled by the MARD team and the NNRU.

Requests for information not concerned with recovery of a debt are handled by the Gateway Exchange Team (GET).

Restrictions on recovery

Monetary limits

The monetary limit is set out in the individual MOU/ MOA. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Old claims

As a general rule mutual recovery assistance will not be provided where the debt is more than five years old, unless there are exceptional circumstances (for example, fraud).

The period is normally calculated from the date when the debt is established. However, if the debt is contested / disputed, the time limit is calculated from the date from which the debt or revised debt has been confirmed.

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

Operational considerations

The MARD Team / NNRU will not normally action any request for recovery action unless:

  • all possible recovery action has been exhausted in the country in which the debt has arisen. In the UK this could include, for example, any distraint or county court action.
  • the debt is not in dispute or under appeal or still within the appeal period. If recovery action has already commenced and the tax debt is then disputed, the MARD team will normally ask that recovery action be suspended until the debt or revised debt is confirmed. Determinations for SA debts and central assessments for VAT debts cannot be disputed - they can only be replaced with a return.

Period of limitation

The period of limitation is the amount of time we have in which to recover a debt and is:

  • determined by the law in the applicant country
  • different to the five year time limit referred to above, which relates to the age of the debt at the time when it is referred for assistance.

In England, Wales and Northern Ireland, there is no limit on the period of time over which we can seek to recover tax or duty owed to the Crown.

In Scotland, this period is 20 years.

Interest

UK interest on inbound requests for recovery is charged at the rate applied to income tax under Section 178 of the Finance Act 1989.

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

Foreign country profiles

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