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HMRC internal manual

Enquiry Manual

From
HM Revenue & Customs
Updated
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Determine who can support the enquiry: Debt Management and Banking: debt management

Most of the routine accounting functions are now administered through the SAFE system.

This leaves Debt Management officers to deal with the compliance aspects of debt management, which is mainly chasing up those who will not or cannot pay.

An informal approach to collecting outstanding debts through reminding letters, telephone calls and visits to premises or private houses is often very successful.

Where this is not successful, DMB can take the following action

  • distraint (known as ‘poinding’ in Scotland). DMB has statutory authority to destrain upon a defaulter’s goods. Action obviously depends upon the availability of goods, but where there are sufficient, distraint is very effective, the threat of it usually being enough to secure payment
  • County Court Proceedings: judgement may be obtained for the debt in the County Court
  • Summary Proceedings: small arrears may be pursued through the Magistrates Courts.

When pursuing arrears, DMB officers often discover information that will help enquiry officers build up a picture of the taxpayers personal finances. Even where DMB has not been successful in contacting the taxpayer during a visit, there may be some notes about the person’s private house or other indicators of their personal wealth.

During the course of your enquiry you should review all the relevant case papers for indications that the tax payer is a bad payer. This may either help indicate their attitude to paying tax (and possibly compliance generally) or that they have genuine financial difficulties, or both.

Where you have reason to believe that DMB may have been involved in pursuing outstanding debts, you should ask them for any relevant information that they may hold. There will be a chance that DMB has had some contact with the taxpayer and as a result will have information that will help you with your enquiry. For example, assets may have been assessed for distraint purposes, or the taxpayer may have been examined in the County Court.

You may also hold information which will be of use to DMB. In cases where you have not had any co-operation from the taxpayer, or you believe there are means problems, you should always alert DMB to the fact that collection is likely to be difficult and provide as much useful background as you can EM3955.

For guidance about how to contact DMB, see EM1020.