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HMRC internal manual

Debt Management and Banking Manual

DMBM560265 - Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (OECD and DTA): Requests for Recovery received from other countries: EIS Summary Warrant Team 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 Scotland
  • the International Debt Unit, MARD Team have been unable to obtain payment from a debtor themselves, and
  • Summary Warrant 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 full details of the debt due. They will also transfer ownership of the debt to you (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Take action to recover the debt, using the same procedures as you would for a UK income tax debt by obtaining Summary Warrant and arranging for service of a charge for payment.

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 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:

  • 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 so that they can monitor the case to ensure the debtor does not default
  • transfer ownership of the (This content has been withheld because of exemptions in the Freedom of Information Act 2000) record back to the MARD team and monitor the case to ensure the debtor does not default.
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 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. 

The International Debt Unit, MARD Team will contact the applicant country to seek their agreement to the proposal.

If the proposal is acceptable, the International Debt Unit, MARD Team will let you know.  On receipt

  • tell the debtor that the proposal is acceptable
  • transfer ownership of the (This content has been withheld because of exemptions in the Freedom of Information Act 2000) record back to the International Debt Unit, MARD Team to monitor the case to ensure the debtor does not default.

If the proposal is not acceptable, the applicant country will tell the International Debt Unit, MARD Team what terms are acceptable.  On receipt, the International Debt Unit, MARD Team will write to the debtor to advise them of the terms that would be acceptable.

If the debtor accepts the terms, the International Debt Unit, MARD Team will ask you to transfer ownership of the IDMS record back to them to monitor the case as above.

If the debtor rejects the terms or does not respond, the International Debt Unit, MARD Team will ask you to continue with your action to recover the debt.

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, transfer ownership of the (This content has been withheld because of exemptions in the Freedom of Information Act 2000) record back to 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 applicant 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

  • tell the International Debt Unit, MARD Team about the receipt of the part payment (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • re-calculate 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 B/F, continue with your Summary Warrant action, following the guidance at DMBM670350.

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 and costs

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.

Debtor unable to pay

If the debtor is unable to pay and bankruptcy or sequestration is not appropriate

send the International Debt Unit, MARD Team details of why the debt can’t be recovered via the MARD mailbox

transfer ownership of the (This content has been withheld because of exemptions in the Freedom of Information Act 2000) record back to the International Debt Unit, MARD Team

close your case.