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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: distraint: introduction to distraint: the Department’s statutory right to distrain and charge costs

Sections 6 & 7 Commissioners for Revenue & Customs Act (CRCA) 2005 provide that officers of Revenue and Customs may carry out duties formerly conducted by Collectors of Taxes and officers of Customs and Excise. However, section 7 (4) of the Act requires HMRC to keep recovery by distraint for direct and indirect taxes entirely separate. This means that, although combined working principles must still be observed direct and indirect taxes cannot be included in the same levy or appear on the same Distraint Notice until new legislation is introduced.

Officers of Revenue and Customs are authorised to recover unpaid direct and indirect tax, National Insurance contributions, duties and other debts (treated as if they were tax) by distraint and impose costs in accordance with the following legislation:

Direct taxes

S 61 Taxes Management Act 1970, “Distraint by Collectors”

S121A Social Security Administration Act 1992 (England & Wales)

S115A Social Security Administration (Northern Ireland) Act 1992 (as amended by the NIC and Statutory Payments Act 2004)

Sch12 Finance Act 2003 (Stamp Duty Land Tax)

SI 1994/236: The Distraint by Collectors (Fees, Costs and Charges) Regulations 1994

SI 1995/2151: The Distraint by Collectors (Fees, Costs and Charges) (Amendment) Regulations 1995.

Indirect taxes

S51 Finance Act 1997, “Enforcement by Distress”

SI 1997/1431: Distress for Customs and Excise Duties and other Indirect Taxes Regulations 1997.