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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (Social Security Debts): requests for recovery received from other countries - International Debt Unit MARD team action

General

A request for assistance in recovery should contain at least the mandatory data on an R017 and must be accompanied by an instrument permitting enforcement. A reply should contain at least the mandatory information on an R018.

Requests for recovery will be sent to HMRC where the claim relates to insurance contributions or overpaid family benefits. Where the claim relates to any of the other benefits listed on the form, the request will be sent to the appropriate UK Government Department.

Initial action

Review the request to check for suitability as per MARD SWI 1.

Request does not contain all required information

If the request doesn’t contain all the information you need in order to action it:

  • send an R018 to the applicant country and ask for the missing information
  • BF the case for two months.

If the applicant country doesn’t respond within two months, write to them and ask them for an update using an H001. BF the case for a further month and if they still fail to provide the missing information after the month has expired reject the case.

Request rejected

If the request is not accepted:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • send an R018 to the applicant country and explain the reason why the request has been rejected
  • close your case.

Request accepted

If the request is accepted:

  • set up a new case on the MARD database, SAFE and IDMS following MARD SWI 5
  • check HMRC systems to confirm the debtor is at the address mentioned in the request.

Debtor’s address confirmed

  • Send a completed MARD2A letter (found on SEES Forms and Letters) and a copy of the Instrument Permitting Enforcement (translated into English if necessary) to the debtor.
  • BF for one month to await payment.

Debtor’s address different to that provided by applicant country

If you confirm a UK address for the debtor but this differs from the address shown on the request for recovery, if the address provided by the other country is:

  • in the address history, send a completed MARD2A letter (found on SEES Forms and Letters) and a copy of the Instrument Permitting Enforcement (translated into English if necessary) to the debtor at the latest address held by HMRC; send a completed R018 to the applicant country to tell them of the new address and the action you will take
  • not in the address history but is a valid UK address, send a completed MARD2A letter (found on SEES Forms and Letters) and a copy of the Instrument Permitting Enforcement (translated into English if necessary) to the debtor at both addresses.

BF for one month to await payment.

Debtor not found

If there is no record of the debtor on our systems, but the address provided by the applicant country is a valid UK address, send a completed MARD2A letter (found on SEES Forms and Letters) and a copy of the Instrument Permitting Enforcement (translated into English if necessary) to the debtor at the address provided by the applicant country.

Debtor has no UK assets

If your information indicates that the debtor has no UK assets that could be used to satisfy the debt:

  • send an R018 to the applicant country to advise them that the claim cannot be recovered and explain why
  • (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)
  • close your case.

Debtor not resident

If the debtor is not resident in the UK, but you have information to indicate that they have UK assets that could be used to satisfy the debt, deal with the case in accordance with DMBM560775.

Debtor pays the debt in full

If the debtor pays the debt in full:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • arrange for the payment to be transferred to the applicant country as per MARD SWI 10
  • send a completed R018 and an R004 to the applicant country once you have received confirmation from Finance that the payment has been successfully transferred to them
  • close the case.

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 they send their request for recovery, they will advise whether time to pay is:

  • acceptable without further consultation
  • only acceptable after consultation
  • not acceptable at all.

Acceptable without further consultation

If the debtor puts forward a proposal for payment, deal with as per the guidance in DMBM800000.

If the proposal is not acceptable, reject the case as per normal guidelines.

If the proposal is accepted:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • advise the debtor that the agreement is acceptable as per the normal rules
  • send an R018 to the applicant country to advise them of the details of the proposal
  • monitor the case to ensure the debtor does not default; if the debtor defaults, follow the normal TTP process for defaulted time to pays.

Only acceptable after consultation

If the debtor requests time to pay and the applicant country has not already said this can be authorised, consider the proposal as per the guidance in DMBM800000; if the proposal would:

  • not be acceptable if it were a UK debt, reject the request as per the normal guidelines
  • 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
    • send an R018 to the applicant country to seek their agreement to the proposal.

If the proposal is agreed, the applicant country will notify you on an R036 or equivalent.

If the proposal is acceptable:

  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • tell the debtor that the proposal is acceptable
  • monitor the case to ensure the debtor does not default; if the debtor defaults, follow the normal TTP process for defaulted time to pays.

If the debt is already with enforcement, tell them to refer the case back to you to monitor.

If the proposal is not acceptable, the applicant country will tell you what terms are acceptable. On receipt, write to the debtor to advise them of the terms that are acceptable. If the debtor:

  • accepts the terms, monitor the case as above; if the debt is with enforcement, ask them to refer the case back to you to monitor
  • rejects the terms or fails to respond, consider the next appropriate action to recover the debt; if the debt is with enforcement, ask them to continue with their 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 the debtor fails to respond, consider the next appropriate enforcement action.

Debtor makes a partial payment

If the debtor pays part of the debt:

  • write to the debtor requesting the remaining payment plus any additional interest due
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • arrange for the payment to be transferred to the applicant country (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • send a completed R018 and an R004 to the applicant country once you have received confirmation from Finance that the payment has been successfully transferred to them
  • BF the file for further payment.

(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)

  • (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)

Debtor claims they can’t pay the debt

If you are satisfied that they can’t pay:

  • (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)
  • send a completed R018 to the applicant country and explain why no further UK recovery action is possible
  • close the case.

If you are not satisfied that they can’t pay:

  • advise the debtor that payment must be made immediately
  • if payment is not made, deal with as below - ‘Debtor doesn’t respond or payment is not received’.

Debtor doesn’t respond or payment is not received

If you are satisfied that the debtor is at the stated address, consider the next appropriate action to recover the debt. If it is a:

  • family benefit debt, you can’t use distraint/TCoG to recover the debt; therefore, if the debtor fails to pay, consider whether county court proceedings are appropriate(This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • contributions debt, recover as if it was a UK NICs debt.

Referring the debt for enforcement action

Before you refer the debt to the relevant office for the next enforcement action, issue the appropriate IDMS10(SEES) Enforcement Warning letter and enforcement fact sheet to the debtor.

If the debtor fails to pay or respond to the warning letter, refer the debt to the relevant enforcement office for action using the agreed referral process. If the referral is to:

  • Field Force, do not transfer ownership of the IDMS or SAFE record; ensure you include any details of whether time to pay is acceptable and if so under what terms within the referral papers
  • another enforcement team, transfer ownership of the debt to them on IDMS, but keep ownership of the SAFE record; ensure you include on the Notes and Assets page details of how to deal with TTP offers.

Referring the debt for insolvency action in Northern Ireland

Before you refer the debt to the relevant office, issue the appropriate IWL (found on SEES Forms and Letters), a copy of your initial demand letter, the IPE and the relevant enforcement fact sheet to the debtor.

If the debtor fails to pay or respond to the warning letter, or if their response indicates that insolvency remains appropriate, refer the debt to EIS Edinburgh for action using the EIS referral process. Transfer ownership of the debt to them on IDMS, but keep ownership of the SAFE record.  Ensure you include on the notes and assets page details of how to deal with TTP offers.

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 DMBM560730.

Reduction or withdrawal of a debt

If the debt is reduced or withdrawn, otherwise than as a result of a dispute, the applicant country will notify you of the fact on an R025 or equivalent. They should tell you the reason for the reduction or withdrawal and the action they want you to take.

If the debt has been reduced, they will also provide you with a revised debt breakdown.

On receipt, update SAFE and IDMS with the revised debt figures. If the:

  • debt has been reduced, SAFE will recalculate the interest, continue with your action to recover the amended debt
  • debt is withdrawn in full, close the case
  • case has already been transferred for enforcement or insolvency action, notify the relevant office immediately of the reduction or withdrawal.