HMRC will vigorously pursue any unpaid tax usually by taking “enforcement action” so it is always important to deal diligently with you tax affairs and contact HMRC in the event you are unable to pay your tax as and when due.
There are a number of enforcement options available to HMRC:
Debt Collection Agencies
HMRC regularly use the services of a number of debt collection agencies to collect debts on their behalf. The agency will then correspond with you direct and any payments are made to the agency for onward transmission to HMRC.
Taking control of goods
HMRC have the option to take control of company assets via a Controlled Goods agreement (formerly known as a Walking Possession Order). This is enforced by a visit to the business premises when a list of assets and their value is taken.
You are asked to sign the “controlled goods agreement” at this stage which effectively states the terms under which you are to be allowed to retain the goods listed in the agreement.
If you subsequently breach the repayment terms of the agreement you will be issued with a notice of intention to re-enter the premises, giving you at least two days’ notice before bailiffs can enter and uplift the goods listed. These goods can then be sold and the proceeds offset against the tax debt. If sufficient is recovered to clear the debt in full plus associated costs, the balance will be paid to the company.
Winding up petition
HMRC can issue a demand for payment if a company refuses or is unable to pay its tax debt. A winding up petition can subsequently be issues if the company fails to pay the debt or provide evidence that it is genuinely disputed.
On the making of a winding up order the company will no longer be able to trade and will come under the control of the Official Receiver, who duties are to protect the company assets and undertake an investigation into the conduct of the directors and any shadow directors.