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HMRC internal manual

Debt Management and Banking Manual

DMBM560255 - Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (OECD and DTA): Requests for Recovery received from other countries: Field Force action

International Debt Unit, MARD Team referrals

Where

  • an applicant country has asked the UK to recover a tax or duty debt owed to them by a debtor living in England, Wales or Northern Ireland
  • the International Debt Unit, MARD Team have been unable to obtain payment from the debtor themselves, and
  • TCoG/distraint action has been determined as the next appropriate recovery action

the International Debt Unit, MARD Team will send the debtor an IDMS10 SEES enforcement warning letter and enforcement factsheet.

If the debtor fails to pay or respond to the warning letter, they will refer the case to you for action. They will send you a referral form explaining the action you need to take, together with supporting papers detailing the debt due. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Take TCoG/distraint action to recover the debt, using the same procedures as you would for a UK income tax debt.

Debtor requests time to pay

If the debtor requests time to pay, you can only agree it if you have authority from the applicant country to do so.  When the International Debt Unit, MARD Team refer the debt to you, they will advise whether time to pay is

  • acceptable without further consultation
  • only acceptable after consultation, or
  • not acceptable at all
Acceptable without further consultation

If the debtor requests time to pay, deal with as per the guidance in DMBM655820.

If the offer would not be acceptable if it were a UK debt, reject the request as per the normal guidelines.

If the offer would be acceptable if it were a UK debt:

  • advise the debtor that the agreement is acceptable as per the normal rules
  • notify the International Debt Unit, MARD team of the details of the proposal and close your case
Only acceptable after consultation

If the debtor requests time to pay and the applicant country has not already said this can be authorised, deal with the proposal as per the guidance in DMBM800000

 

If the offer would not be acceptable if it were a UK debt, reject the request as per the normal guidelines.

If the offer would be acceptable if it were a UK debt:

  • tell the debtor that you will need to consult with the applicant country before you can tell them whether or not the proposal is acceptable.
  • notify the International Debt Unit, MARD Team of the details of the proposal and close your case. 

The International Debt Unit, MARD Team will liaise with the applicant country and the debtor to facilitate a TTP agreement, and will monitor it to ensure the debtor doesn’t default.

If the debtor rejects the terms or does not respond, the International Debt Unit, MARD Team will send you a new referral. The referral papers will include details of the time to pay terms that are acceptable to the applicant country.

Not acceptable at all

Advise the debtor that time to pay is not acceptable and ask for payment in full.  If debtor fails to respond, continue with your action to recover the debt.

Debtor pays

Payments will normally be made direct to the Accounts Office Shipley who will then allocate the payment to the charge (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

If payment is made in full, including UK enforcement fees and costs, notify the International Debt Unit, MARD Team and close your case.

Where it is only possible to secure payment from the debtor for the debt alone, UK enforcement fees and costs should be deducted from any payments recovered. The balance should then be set off against the other country’s debt.

If the payment is a time to pay instalment, tell the International Debt Unit, MARD Team about the receipt of the instalment (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

If the payment is a part payment, but not part of a time to pay proposal, return the case to the International Debt Unit, MARD Team. They will:

  • recalculate the UK interest due on the remaining balance if appropriate
  • write to the debtor requesting the remaining payment plus the additional interest
  • B/F for 1 month.

If the debtor hasn’t paid the outstanding balance on the BF, the International Debt Unit, MARD Team will send you a new referral.

Debtor disputes the debt

If the debtor disputes their liability to, or the accuracy of, the debt, deal with their dispute as per the guidance in DMBM560295

HMRC Enforcement fees

UK fees should be charged in accordance with normal practice and accounted for in accordance with the guidance in DMBM656340.  Such fees are retained by the UK.

TCoG/Distraint not appropriate or unsuccessful

If TCoG/distraint action is not appropriate or is unsuccessful, send the International Debt Unit, MARD Team an outcome report (This content has been withheld because of exemptions in the Freedom of Information Act 2000) and close your case.