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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: distraint: after the levy: Company Administration Order (CAO) - “Notice of intention” filed or order made following levy

A ‘notice of intention’ is filed or CAO made after you have levied

If, after you have levied distraint on a company, you discover that:

  • a ‘notice of Intention to appoint an administrator’ has been filed with the court
  • an application for a Company Administration Order (CAO) has been made or
  • a Company Administration Order has been made

suspend, but do not abandon your distraint.

Effect of a ’notice of intention’ or CAO

There are a number of routes into administration but broadly the effect of a company either:

  • filing a ‘notice of intention to appoint an administrator’ with the court
  • the making of an administration order

is to create a moratorium.

This means no legal process, including distraint, may be instituted or continued against the company without the consent of the administrator or permission of the court. The appointment of the administrator will take effect within 10 business days of the date the notice of intention is filed.

Action to take

  • Contact the administrator immediately.
  • Advise that you are in possession.
  • Establish whether:

    • he is prepared to give consent for you to continue
    • what his intentions are regarding the distrained assets or the business generally.

If the administrator will not consent to you completing the levy, advise that you are not abandoning the levy and that you will seek further advice from your technical manager.

Note: Where HMRC have levied we consider we have secured creditor status over the distrained goods therefore cases involving distraint followed by CAO require special treatment. Your technical manager should take up correspondence with the insolvency practitioner and liaise with EIS as appropriate.

EIS Worthing are responsible for the Department’s voting and claims in an administration but distraint responsibility remains with the Field Force technical manager. So you should not send distraint papers to EIS.