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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: taking control of goods (TCoG): the Notice of Enforcement

The Notice of Enforcement and the necessary fees can be issued automatically by the system or manually on a case-by-case basis. A fee of £75 is chargeable to the debtor for the Notice of Enforcement; see DMBM657160 for information regarding TCoG fees.

Content of the Notice of Enforcement

You must not take control of goods unless the debtor has been given notice in writing of the debt as this is an essential part of the taking control process. The Notice of Enforcement must contain the information specified in the regulations; it must therefore contain:

  • the name and address of the debtor
  • the reference number or numbers (this will be the head of duty reference)
  • the date of the notice
  • the enforcement power under which the debt (including interest) is enforceable which, in all HMRC cases, will be Section 127 Finance Act 2008
  • the details which make the debt clearly identifiable to the debtor (the MOJ agree that a Statement of Liability attached to the notice will be acceptable)
  • the amount payable including interest
  • the amount of any enforcement costs (in other words, Fee 1) incurred up to the date of the notice
  • the possible additional costs of enforcement if the sum outstanding should remain unpaid at the date and time specified on the notice (include all stage fees, exceptional costs, auctioneer costs and accruing interest; this can be the scale and not the actual amounts)
  • how and between which hours and on which days payment of the sum outstanding may be made
  • a contact phone number and address at which, the EA/EA’s office may be contacted (including the days on which, and between what hours, they can be contacted)
  • the date and time by which the sum outstanding must be paid to prevent goods being taken into control (the MOJ agree that HMRC may give a time and date 14 days after the date on the notice rather than the specific date).

Methods of giving the Notice of Enforcement

The Notice of Enforcement must be given by the enforcement agent or their office. HMRC has chosen to give the notice by post (addressed to the debtor at the place, or one of the places, where the debtor usually lives or carries on a trade or business); however, legally the notice can also be given either:

  • by fax or other means of electronic communication
  • by hand through the letter box of the place, or one of the places, where the debtor usually lives or carries on a trade or business
  • where there is no letterbox, by affixing the notice at or in a place where it is likely to come to the attention of the debtor
  • where the debtor is an individual, to the debtor personally
  • where the debtor is not an individual (but is for example, a company, corporation or partnership) by delivering the notice to either:
    • the registered office of the company or partnership
    • the place, or one of the places, where the debtor carries on a trade or business.

Issuing a Notice of Enforcement via IDMS

Record an IDMS action history note of ‘DTO Review Complete’ then ‘Notice of Enf’. IDMS will issue a Notice of Enforcement along with a Statement of Liability (SOL) and a payslip (the payslip will quote the ETMP fees reference number). This action will be automatically noted on Action History notes and ETMP will raise a fee of £75 (Fee 1) which will pass to automatically link to the IDMS associated debt.

Any manually created ETMP fee work item will not automatically link; it will be put on the C/W Distraint role instead. After 14 days it will appear with a next action of ‘Contact TP’ in the management unit that requested the Notice of Enforcement.

Minimum period of the Notice of Enforcement

An enforcement agent cannot take control of the debtor’s goods until seven clear days have passed since giving the notice, as this is the legal minimum (‘clear days’ is defined in DMBM657020). (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Effects of the Notice of Enforcement

Once the notice is given, the creditor acquires certain rights over the debtor’s goods (the goods are bound) known as binding in property. The effect of goods being bound changes their nature and means any subsequent assignment, sale or transfer of interest in the goods by the debtor is subject to the creditor’s rights over those goods. In theory, this means that the creditor can pursue the bound goods if they are transferred to another person unless that person obtains ownership in good faith, for valuable consideration and without notice.

HMRC does not intend to apply these rights to normal stock and so on (unless insolvency occurs, and control has been taken; in which case, it may be useful to prove ‘security’ for the debt), but it may be used exceptionally in cases where the debtor is trying to put high value goods out of reach. If you believe a debtor is deliberately trying to prevent you seizing valuable assets by claiming that they belong to a third party and you think the transfer is not genuine, you should obtain copies of the bills of sale and so on and seek advice from your manager.