HMRC Bailiffs: What Are Their Rights?

What happens if you are visited by a HMRC bailiff and what can they take from your property?

While HMRC is the most common creditor for businesses in the UK, falling behind on tax payments can pose a serious problem for your company. Persistent late or missed payments will not go unnoticed, and HMRC is persistent in pursuing delinquent payers, even resorting to sending in bailiffs if the situation remains unresolved.

HMRC doesn’t immediately involve bailiffs at the first sign of a missed or late payment. Instead, you will receive reminders, face late payment fines, and incur interest charges on your outstanding balance. During this stage, it is highly advisable to contact HMRC and openly discuss your current situation. Negotiating a Time to Pay arrangement may be possible, allowing you to settle your HMRC debts through a series of monthly instalments. However, be aware that the longer you ignore the problem, the less likely you are to reach a compromise with HMRC.

Bailiffs are only used as a last resort when other collection methods have been attempted and proven unsuccessful.

Are HMRC bailiffs different to other bailiffs?

This is indeed a complex matter because technically, there is no official role known as an ‘HMRC bailiff.’ HMRC employs both third-party bailiffs and their own enforcement officers. Enforcement officers work directly for HMRC and carry official identity cards. Bailiffs, on the other hand, are not HMRC employees but are engaged by HMRC to carry out collection tasks on their behalf.

Whether you encounter an enforcement officer or a bailiff contracted by HMRC, their powers are quite similar, especially when they have been authorised by the court.

Can a HMRC bailiff or enforcement officer enter my premises?

You are not obligated to permit a bailiff into your premises, except when they have court authorisation. They cannot enter your home unless it serves as your registered business address. In such cases, they are allowed to enter, but entry cannot be forced, and they must only seize goods owned by the company.

For purely commercial premises, forced entry is possible with authorisation from a Justice of the Peace. If the property includes both residential and commercial units, the bailiff or enforcement officer must adhere to additional rules.

Visits to residential or part-residential properties can only occur within specific hours (not between 9 pm and 6 am), with extra precautions needed if a vulnerable person or a child under 16 is present.

What can HMRC bailiffs or enforcement officers take from my business?

When an enforcement officer or bailiff, acting on behalf of HMRC, visits your premises, the primary objective is to seize goods that can be sold to settle your debt. Unfortunately, as the seized assets are typically sold through auctions, they often fetch much less than their true market value. This means that the value of goods taken from your premises by bailiffs can exceed the actual cost of what you owe HMRC, as the lower resale value is factored into the seized items.

Certain items cannot be taken by bailiffs or enforcement officers, including safety equipment, livestock, goods on hire purchase, and anything that cannot be removed without causing damage.

For limited company HMRC debts, bailiffs are only permitted to seize property belonging to the company; anything owned by an individual, even if associated with the business, cannot be seized. This protection arises from limited liability, creating a legal distinction between a limited company and its directors. It’s important to note that this protection applies to incorporated companies and not to individuals operating as sole traders. As there is no legal separation between a sole trader’s business and personal position, sole traders can find themselves personally liable for HMRC arrears and other business-related debts.

Read More :

• What Happens If Your Limited Company Cannot Pay
• Can business HMRC tax debts be written off
• What happens if I can’t pay my tax bill
• Tax HMRC

What is a Controlled Goods Agreement?

A Controlled Goods Agreement (CGA) involves a bailiff recording an inventory of assets. Instead of immediately removing the goods, they remain on your premises until an HMRC agent returns to seize them. The CGA provides a seven-day breathing space, allowing additional time to secure funds for settling tax arrears. Failure to do so results in the assets subject to the CGA being taken away and sold through public auction.

If you’re struggling with HMRC tax obligations, reach out to Vanguard Insolvency for assistance. Difficulty in paying taxes often indicates deeper financial issues within a business. Our experienced insolvency practitioners can assess your situation and provide advice on the most suitable course of action. Call today to arrange a free, no-obligation consultation.