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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
, see all updates

Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (Non EU Countries): inbound cases - requests for assistance - direct tax DM action

All inbound requests for assistance must be treated as if they were UK income tax debts. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Requests for Information

Requests for information are always dealt with by the MARD team and will not be transferred to you for action.

Another country may contact the MARD team asking for assistance in serving a legal document or a decision to one of their debtors who is now living within the UK. The MARD team normally serve these documents by registered post.

However, if they are unable to serve the documents by post they will ask you to make arrangements to serve them by hand. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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If the debtor lives in England, Wales or Northern Ireland, you must serve the documents personally within the timescales given.

If the debtor lives in Scotland, instruct the Sheriff Officer to serve the requested documents.

Follow the relevant guidance about personal safety during outdoor calls and about risk assessment for staff that have customer contact.

After service

Once the documents have been served

  • advise the MARD team immediately of the date they were served and
  • return the certificate of service and copy documents to them by registered post.

Debtor not at address

If the documents can’t be served because the debtor is not at the address provided,

  • notify the MARD team immediately and
  • return all the documents to them by registered post.

Requests for Recovery Action

Another country may contact the MARD team asking for assistance in recovering a tax debt from one of their debtors who is now living within the UK. The MARD team will initially contact the debtor requesting payment of the debt. However, where action by the MARD team fails to produce payment of the debt, they will transfer the case to the appropriate DTO to consider further action.

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For England, Wales & Northern Ireland this includes

  • the action you need to take
  • a description of the debt for distraint (this should normally be attempted first)
  • particulars of claim for county court action and how to reply to a defence (England and Wales only)
  • accounting and banking arrangements
  • time limits and critical dates.

For Scotland this includes

  • details of any known assets or arrestable source
  • particulars of the debt
  • accounting and banking arrangements
  • time limits and critical dates.

DTOs in Scotland should refer to Debt Management Group Office for advice where summary warrant or sheriff court action is needed.

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Action to take

On receipt of a case:

  • consider all normal UK enforcement options
  • follow the relevant guidance about personal safety during outdoor calls and about risk assessment for staff who have customer contact
  • send a warning letter MARD (Non EU) 4, MARD (Non EU) 5 as appropriate, or if in Scotland MARD (Non EU) 6
  • take enforcement action in accordance with current guidance.

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Priority

The MARD team will show the DM work priority status to be applied to the recovery of the debt on their covering letter.

UK Interest

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Disputes

If the debtor disputes their liability to or the accuracy of the debt, they are to be told that they must contact the Applicant Country and set out the reasons for their dispute in writing. Ask them to send you a copy of the letter. Meanwhile continue with recovery action.

On receipt, suspend recovery action and forward the information supplied by the debtor to the MARD team to pass onto the requesting country to resolve the dispute.

Once resolved the MARD team will notify you of the outcome and what action (if any) you need to take.

Receipt of payments

Payments will normally be made direct to the Accounts Office Shipley (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) On receipt

  • if you have responsibility for pursuit of the debt, keep a note of any unpaid tax and interest and continue pursuit.
  • notify the MARD team of receipt of the payment.

If payment is made in full

  • close the case and
  • return papers to the MARD team.

Payment received locally

If exceptionally payment is received locally

  • prepare one pro-forma payslip for each of the charges (if not received with the payment) (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • send the payslip and payment to Shipley as normal and
  • notify the MARD team of receipt of the payment. If payment is made in full, close the case and return papers back to the MARD team.

If you receive a cheque in sterling from the debtor made payable to HMRC for enforcement costs that are recoverable, follow the current guidance for dealing with payments received locally.

Cheque payable in foreign currency

If you receive a cheque made payable to the foreign country in their national currency

  • send it to the MARD team with sufficient information to identify the debt to which it relates
  • return the papers to the MARD team, if paid in full.

No payslip received

If no payment is received without a payslip, prepare a proforma payslip.

Debtor unable to pay

If the debtor is unable to pay and it is a suitable case for insolvency proceedings

  • prepare the case in accordance with DMBM685000
  • send the case papers to the appropriate EIS office, following the Data Handling guidelines(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
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  • tell the MARD team of the action you have taken.

If the debtor is unable to pay and it is not a suitable case for insolvency proceedings by an EIS office

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  • return paperwork to MARD team
  • explain why the debt is not recoverable.

The MARD Team will notify the other country accordingly.

OUID for EIS

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Costs

Costs should be dealt with in line with the relevant guidance on costs.