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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Summary warrant: Employer fails to comply with an earnings arrestment

Initial action

Failure to operate an earnings arrestment renders an employer liable to the creditor for any sums that he should have paid over.

As soon as you know that such a situation has arisen you must

  • contact the employer and ask why he has not operated the earnings arrestment and
  • request payment of the sums that should have been deducted and paid over to you.

Any case of failure to comply with an earnings arrestment must be dealt with as a priority at all stages (DMBM671130).

If more than one year elapses from the date on which any deduction/payment should have been made then no claim can be made against the employer for recovery of the monies due.

If after contacting the employer the failure to comply with operating the earnings arrestment still continues you will have to consider whether or not you should take legal action against the employer.

Firstly you will have to confirm the validity of the warrant and the associated documents. To do so you must ensure that the name(s) and address(es) is/are correct and consistent on all the documents.

Particular attention must be taken with regard to partnership cases where only one partner is shown on the records. You must ensure that all partners are detailed on the warrant and associated documents.

You must also look out for any payments or amendments made which would alter the total of the debt on the warrant prior to the arrestment.

You must then consider whether or not the case is worth pursuit. To do so you need to check to see if an alternative course of action would be appropriate (screen note details/obtaining any relevant files etc.) For example is there effects/assets or other arrestable sources or is there any likelihood of the sum due being amended.

If there is no alternative course of action that is appropriate then you must confirm that the defender is/was receiving remuneration from the employer at the time of the arrestment.

Further telephone/personal call to employer

Once all the above actions have been taken and you have decided that there is no alternative action to be taken against the defender you should make a further telephone/personal call to the employer and

  • establish why he is failing to operate the arrestment, for example

    • is he unaware of it
    • is he totally ignoring it or
    • is he making the deductions but failing to pay them over
  • explain your proposed legal action and encourage him to operate the arrestment, thus avoiding further legal costs
  • ascertain what the relationship between the defender and the employer is.

Lastly find out if the employer

  • has sufficient assets/effects to cover the debt
  • if he has any outstanding liabilities currently being pursued
  • is likely to be sequestrated in the near future.

Special considerations where employer becomes bankrupt or insolvent

Where the employer becomes bankrupt or goes into liquidation it is important to establish the exact amount that the employer has deducted with regard to the earnings arrestment. This is because the defender is entitled to credit for this sum even although the Department may be unable to recover this amount from the employer.

Credit for these deductions should be given by way of a Type 10 remission and an ordinary claim for the amount of the credit should be lodged in the employer’s sequestration/liquidation.

Raising the sheriff court action

Once you are satisfied that it is worth pursuing a legal action against the employer for his failure to comply with an earnings arrestment, you should immediately arrange for either a summary or ordinary cause action dependent on the sum outstanding to be raised in the sheriff court against the employer for the actual sum he has deducted from the defender. Where the actual sum deducted is not known you can raise an action against the employer to recover the full amount of the debt. It would then be up to the employer to defend the action on the grounds that a lesser sum is payable under the earnings arrestment rules.

You will find examples for both the SP and OC Actions of Furthcoming styles in the appropriate SP or OC styles folder on the Book of Styles disc supplied to you by Debt Management Edinburgh Group Office.

A certified copy of the summary warrant containing the entry for the defender against whom the earnings arrestment has been raised should be included when you lodge your papers in court. Great care should be taken to ensure that all other entries are deleted from this certified copy of the summary warrant.