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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: distraint: preparing for distraint calls: direct tax (DMO) responsibility and action on receipt of indirect tax referral

Responsibility for cases referred to the DMO

Referral of work from the DMU to the DMO (indirect to direct tax) is effectively an inter-office transfer and, barring exceptional circumstances, responsibility for the debt will move to and remain with the DMO until enforcement action is concluded.

The DMO will have responsibility for the case until

  • it is paid
  • enforcement cannot be taken any further
  • the trader becomes insolvent, or
  • goes missing.

When the case is concluded DMO will

  • close IDMS and
  • refer the case back to the DMU using the Outcome Report form.

If CCP is commenced the DMO will

  • continue to have responsibility for the case until the action is concluded but should
  • notify the DMU of the change of enforcement method using the Outcome Report form.

Action on receipt of indirect tax referral

When a referral is received from the DMU, you should

  • check IDMS for existing work items for the same debtor
  • cross reference any other debts traced and link as appropriate
  • create the taxpayer record for the Indirect Tax debt onto IDMS using function CREATE WORK ITEM/TAXPAYER RECORD. The reference format is DMO numeral/B/VRN, as shown on the referral form. Do not issue an IDMS 10.

Note: There is limited functionality for these ‘pseudo’ entries and all updating must be done manually.

New or revised indirect tax debt where referral already held

Where you already have a referral the DMU should immediately notify you of any new or revised debt once it is ready for collection (DMBM655440).

If you only discover this debt at a later stage (such as the RP check, DMBM655550), do not delay collection of the debt you are holding (unless the amounts involved indicate otherwise, for example, you would not usually hold off collecting, say, £15,000, already referred whilst awaiting arrival of an additional £500 but if you are holding a small debt and a larger one is on its way, common sense indicates you would wait for the larger amount before proceeding).