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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Enforcement action: distraint: after the levy: the effects of insolvency following distraint

Effects of insolvency on distraint

Insolvency includes

Companies

administration DMBM656190
   
compulsory liquidation (or winding up) DMBM656220
voluntary liquidation (or winding up) DMBM656210
administrative receivership DMBM656180
company voluntary arrangement DMBM656200

Individuals

bankruptcy DMBM656220
   
individual voluntary arrangement DMBM656200
deceased insolvent estates []()
deeds of arrangement []()

Partnership

Insolvent Partnership Order 1994 DMBM656220
   
partnership voluntary arrangement DMBM656200

The guidance in the following paragraphs summarises the action to take if either insolvency occurs, or a voluntary arrangement is proposed, after you have levied distraint but before you have completed the distraint by sale. These actions will depend on the particular circumstances of the case and the type of insolvency involved.

If the case has already been handed to the auctioneer, he will liaise with you and will retain the papers until your course of action becomes clear.

Any questions regarding undertakings and correspondence in general should be conducted between HMRC and the insolvency practitioner. If the goods are with the auctioneer he should not enter into correspondence or discussions with the practitioner.

In order that the Department’s position is not prejudiced do not refer the case to ICHU for proof to be lodged until the distraint is resolved.

Providing information to the liquidator

The Information Disclosure Guide gives details of what information you may disclose to the liquidator. Disclosure should be limited to information the company would normally be aware of itself. This includes details of the sale proceeds at auction, whether in total or by individual item (which you will have to obtain from the auctioneer).