HM Revenue & Customs – Distraint

HMRC Distraint

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If you receive a letter from HMRC as shown below, things are becoming very serious.

HM Revenue & Customs

Distraint

What it means you

This fact sheet is intended for companies, partnerships or individuals – unless the text says otherwise.

If you do not pay, we will start the legal process as soon as possible after the date in this covering letter.

Distraint, sometimes referred to as Distress, is a process where we can visit your home or business, seize your possessions and arrange for them to be sold at public auction. You must act quickly – if we take your goods it could close down your business.

The visit to seize your possessions

an officer of HM Revenue & Customs will call, generally without notice, at your home or business premises. You can ask the officer to show you proof of identity.

Distraint

The officer will ask you for payment. If you don’t pay, the officer will make a list of your possessions on a C204 Distraint notice and inventory form. Your possessions can be sold to pay what you owe.

The list could include

  • your car, van or lorry
  • office equipment
  • furniture and electrical items
  • personal belongings (individual only)
  • stock

The list will not include

  • necessary tools of your trade, unless there are no other distrainable goods
  • household items, such as bedding and cooking equipment
  • your home
  • items subject to a hire purchase agreement

The officer will give you a copy of the list. It will not include items that belong to someone else or items that are jointly owned. We may ask for proof of ownership.

You then have five calendar days to pay what you owe. The total will include the cost of the distraint (the C204 Distraint notices and inventory form includes a scale of costs).

Your choices

  • sign the C204 Distraint Notice and inventory form. Usually, the goods can stay on your premises. You can use the goods but you cannot sell them or give them away.
  • Don’t sign the C204 Distraint notice and inventory form. We can take the goods immediately.

Selling your goods

if you don’t pay within five calendar days of the date of the visit, an independent auctioneer will take away your possessions the sale.

Costs

you must also pay the cost of valuing and selling at public auction.

Money raised

If the sale does not raise enough money to cover what you owe, we will take you to court to recover the balance.

HM Revenue & Customs commitment

We aim to provide a high quality service with guidance that is simple clear and accurate.

We will:

  • the professional and helpful
  • act with integrity and fairness, and
  • treat your affairs in strict confidence within the law

We aim to handle your affairs promptly and accurately so that you receive or pay only the right amount due.

If you have a complaint

For information about our complaints procedure go to www.hmrc.gov.uk and under quick links select complaint and appeals.

You’re rights

We cannot use force to enter your premises to Distrain, unless authorised by a Justice of the Peace.

For tax and National Insurance contributions debts (including tax credits overpayments) we will only call between sunrise and sunset. We will try to call during normal working hours.

For VAT and Excise debts we will call between 8.00 AM and 8.00 PM unless your business operates outside these hours.

We cannot call on Sundays or public holidays.

Of all the debts that you may have, this will be one of the most serious!


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