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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
, see all updates

Enforcement action: distraint: costs and accounting: accounting for costs and LOMR / MIS

Types of distraint costs

Distraint costs are classified as chargeable or non chargeable.

Chargeable costs - to be recorded on SAFE

Only chargeable costs are recorded on SAFE.

These are costs HMRC charges the debtor for

  • levy
  • possession.

They are called chargeable costs because they can be recovered from the debtor, if necessary through enforcement proceedings.

Recording chargeable costs on SAFE

To create a distraint cost charge on SAFE

  • follow the link  

Non chargeable costs - NOT to be recorded on SAFE

Non chargeable costs can be

  • costs charged to HMRC by the bailiff or auctioneer for

    • attendance fees
    • setting up fees
  • costs charged to the debtor by the auctioneer for

    • appraisal
    • removal
    • storage
    • sale
    • advertising.

Although non chargeable costs are not recorded on SAFE, you must keep a record of them. This is because Finance needs to know the amount that HMRC has paid for costs which it cannot charge the debtor.

Keeping a record of non chargeable costs

  • Keep a manual or electronic record on non chargeable costs.

Guidance on reporting them will be issued before each Interim Balance.

Additional record keeping - LOMR / MIS

There is still a requirement to record and keep information for LOMR and MIS.

So long as you keep the information, any form of recording is acceptable.