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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: taking control of goods (TCoG): legislation, powers and definitions

From 6 April 2014 distraint legislation for England and Wales is repealed and replaced with Part 3 of the Tribunals, Courts and Enforcement Act 2007 (TCEA 2007), ‘Enforcement by taking control of goods’. This means that in England and Wales, HMRC will now be ‘taking control of goods’ under Ministry of Justice (MOJ) legislation rather than taking distraint under its own legislation. The supporting regulations are SI 2013/1894 (The Taking Control of Goods Regulations 2013) and SI 2014/1 (The Taking Control of Goods (Fees) Regulations 2014).

Note: The distraint legislation will continue to be valid for Northern Ireland only.

For convenience, HMRC has adopted the acronym TCoG (Taking Control of Goods) to describe the new process.

Taking control must be under an enforcement power. This can be effected under a court order or judgment such as a high court writ or county court warrant or by an enforcement power, which is statutory and does not require a court order or judgment.

The enforcement power enabling HMRC to take control is Section 127 Finance Act 2008 (S127FA08). This says:

“Section 127 Enforcement by taking control of goods: England and Wales

This section applies if a person does not pay a sum that is payable by that person to the Commissioners under or by virtue of an enactment or under a contract settlement.

The Commissioners may use the procedure in Schedule 12 to the Tribunals, Courts and Enforcement Act 2007 (taking control of goods) to recover that sum.

This section extends to England and Wales only”.

For information on TCoG fees, see DMBM657160.

An officer of HM Revenue & Customs (or an enforcement agent) must now:

  1. issue a written Notice of Enforcement to the debtor before we can TCoG - this must provide information stipulated in Regulations and will cost the debtor £75 Regulations 6, 7 & 8 of The Taking Control of Goods Regulations 2013 (TCoG Regs 2013)
  2. leave a Notice after Entry (which could incorporate the current C204 walking possession form) Regulation 30 TCoG Regs 2013.
  3. take control of goods between the hours of 6am - 9pm any day of the week; exceptions to this are either by court order, where goods are located on premises where the premises are open for business during hours that are prohibited (for example, a nightclub and so on), or where the EA has begun to take control within the permitted hours (provided the time spent is reasonable).
  4. make (or obtain from a qualified, independent valuer) a valuation of the controlled goods and provide the debtor and any co-owner with a copy of that valuation (before the end of the minimum period - seven clear days before sale) Para 36(a) of Sch 12 to TCEA 2007
  5. give the debtor and any co-owner an opportunity to obtain an independent valuation of the goods (before the end of the minimum period - seven clear days before sale) Para 36(b) of Sch 12 to TCEA 2007
  6. give notice of the date, time and place of the sale to the debtor and any co-owner seven clear days before the sale of the goods and within the permitted period (the permitted period is 12 months beginning with the day on which the EA takes control of the goods) Para 40(1) of Sch 12 to TCEA 2007
  7. where jointly owned goods are taken into control, in accordance with their statutory duty, first pay the co-owner a share of the proceeds of those goods proportionate to his interest (seizing co-owned goods did exist in Common Law but it was not HMRC policy to seize co-owned goods). Para 50(6)(a) of Sch 12 to TCEA 2007
  8. give the debtor not less than two clear days’ notice of our intention to use forceful re-entry (after seizure) in order to inspect/remove goods taken under control (unless a lesser period is specified by the court). Reg 25(1) TCoG Regs 2013 (but see Regs 25(2)-(4))
  9. remove goods and secure them in or at a place which is within a reasonable distance from the place where control was taken of the goods. Reg 19 TCoG Regs 2013

General interpretation of definitions

Term Definition
Amount or sum outstanding The amount of the debt and interest that remains unpaid plus fees and costs of enforcement to date.
Binding Rights over goods which means they cannot be disposed of, except in good faith, without being subject to the legal power that bound the goods.
Child Means a person under the age of 16.
Clear days In calculating the number of days, the day on which the period begins is excluded and if the end of the period is defined by reference to an event, the day on which that event occurs is not included.
Controlled goods Goods taken under control that have not been sold, abandoned or returned to the debtor or third party (unless subject to a Controlled Goods Agreement).
Co-owner A person other than the debtor who has an interest in the goods and the EA knows of this interest or would if he or she made reasonable enquires.
Creditor A person for whom the debt is recoverable.
Court The magistrates’ court.
Debt The principal debt plus interest (excluding any fees/costs) also known as the sum recoverable.
Debtor The person liable to pay the debt or, if two or more persons are jointly or jointly and severally liable, any one or more of them.
Disabled person Either a person whose sight, hearing or speech is substantially impaired, who has a mental disorder or who is physically, substantially disabled by any illness, any impairment present since birth, or otherwise.
Enforcement agent A person who is certified by a District Judge to be an enforcement agent or one who is exempt from certification (officers of HMRC are exempt).
Exempt goods Goods that regulations exempt by description or circumstances or both.
Goods Property of any description, other than land.
Money Money in sterling or another currency.
Notice of Enforcement Notice of Enforcement required by para 7(1) of Schedule 12 to Tribunals, Courts and Enforcement Act (TCEA) 2007.
Older person A person aged 65 or over.
Premises Means any place, and in particular includes a vehicle, vessel, aircraft or hovercraft, or tent or moveable structure.
Relevant premises Premises are relevant if the EA reasonably believes that they are the place, or one of the places, where the debtor usually lives or carries on a trade or business.
Securities Includes bills of exchange, promissory notes, bonds, specialities and securities for money.
Specified premises Means premises specified in a warrant issued by the court.
Sum recoverable or sum to be recovered The amount of the debt which remains unpaid which the creditor agrees to accept in full satisfaction of the debt.
Taking control of goods To take control of goods an EA must either secure goods on the premises on which he finds them, if he finds them on a highway, secure them on a highway, where he finds them or within a reasonable distance, remove them and secure them elsewhere, or enter into a controlled goods agreement with the debtor.

List of notices and forms connected to the process

Notices and forms which should or may be given to the debtor at various stages of the process.

In addition to the Notice of Enforcement, other notices, forms and lists may need to be given to the debtor, either when taking control or at a later stage depending on the circumstances. Greater detail is given in the relevant paragraphs.

The notices and forms are as follows.

  • TCoG flyer
  • Notice of Enforcement
  • Notice after entry or taking control of goods (on a highway) and inventory of goods taken into control
  • Notice of immobilisation
  • Controlled Goods Agreement (CGA)
  • List of goods taken away (if debtor absent)
  • Inventory of goods
  • Notice of intention to re-enter premises
  • Valuation of goods
  • Notice that goods have been removed for storage or sale
  • Notice of sale
  • Notice of abandonment of goods