ICAEW’s Tax Faculty provides guidance to members to help them support their clients in response to HMRC’s debt collection action.
As HMRC’s softer approach towards debt collection and time to pay during the pandemic comes to a close, ICAEW has become aware that some taxpayers are receiving unannounced visits from HMRC’s bailiff teams (known as ‘field force’).
Not all taxpayers will be aware they owe tax when HMRC field force arrives at their property. The visits are usually carried out under civil rather than criminal law, but can be alarming nonetheless. Many also feel a sense of embarrassment as these visits are highly visible to neighbours.
In at least one case that ICAEW is aware of, HMRC’s debt collection teams made an unannounced visit despite tax not being due. The taxpayer in question made substantial payments to HMRC for tax that was due over the preceding months. An amended return had been filed by the taxpayer showing a foreign tax credit, reducing the tax liability both for the tax year in question and for subsequent payments on account. However, the amended return had not been processed due to problems with HMRC’s software. Although a note has been added to HMRC’s debt management systems, HMRC could not guarantee that its field force agents would not visit the taxpayer again.
ICAEW is working with HMRC to help to improve communication between its self assessment processing and debt management teams, and to determine whether processing of amended returns could be accelerated where debt management teams have taken unannounced action.
In the meantime, members with clients that receive a visit from field force agents should keep the following key points in mind:
- Taxpayers are not legally obliged to let HMRC enter their property. If they receive an unannounced visit, they should not let HMRC enter their house or business premises and should ask them to leave the letter from HMRC’s debt management and banking department (DMB), which will set out the reasons for the visit. Taxpayers receiving a visit are advised to call their accountant or tax adviser immediately and ask them to liaise with HMRC to resolve the situation on their behalf.
- If HMRC has already entered the taxpayer’s property, the taxpayer is entitled to ask them to leave. There are no legal or financial repercussions from this.
- HMRC staff should not take any documents or information with them without the taxpayer’s consent and without leaving a receipt for any records taken. The advice is that taxpayers should not consent to documents or information being removed from the property. If a taxpayer is subject to a dawn raid, (ie, action under criminal law), they should seek legal representation from a criminal lawyer immediately, as different procedures and rights will apply.
- If a business has a customer compliance manager (CCM) at HMRC and a paper amended return is being filed that reduces the tax due, it would be helpful to call the CCM and ask them to update HMRC’s data systems, including those that HMRC debt management teams have access to. Unfortunately, this solution will not be accessible to all.
This guidance is created by the Tax Faculty, recognised internationally as a leading authority and source of expertise on taxation. The Faculty is the voice of tax for ICAEW, responsible for all submissions to the tax authorities. Join the Faculty for expert guidance and support enabling you to provide the best advice on tax to your clients or business.