How will an HMRC field force officer enforce payment of HMRC arrears?

Failing to settle HMRC debts may prompt a visit from an HMRC field force officer, who will formally request payment. They will collect overdue tax either as a lump sum or in instalments. Non-compliance could lead to the right to seize company assets and sell them to generate funds.


What is an HMRC field force officer and what are their rights?

Also referred to as a distraint officer, an HMRC field force officer is deployed when a company neglects its obligations to HMRC, resulting in VAT or other tax arrears.

They visit your premises if you fall behind on tax payments or fail to uphold an agreed time-to-pay arrangement. HMRC attempts to address these issues through phone calls and other correspondence before sending an officer to your premises. This step is only taken if payment cannot be secured or if cooperation is refused. However, there is typically no advance warning of the impending visit.


What happens during a visit from a field force officer?

Their main objective is to verify the correct address for your business and ensure they are communicating with the correct person. Once this information is confirmed, they will formally request payment for the amount you owe.


Is a field force officer the same as a bailiff?

A field force officer is specifically used to address HMRC arrears, while a bailiff may be employed to collect payment for a wide range of personal and business debts. Many individuals often perceive HMRC field force agents as less forceful than bailiffs, and in many cases, they are considered more reasonable and understanding of the situation.

The primary focus of a field force officer is to prompt payment of what is owed, either through an upfront full payment or a negotiated payment plan, allowing you to clear your debt through instalments.

However, if these options are not viable, similar to bailiffs, field force officers do have the authority to seize company assets and sell them to settle outstanding HMRC debts. This process, known as ‘distraint,’ requires strict adherence to a set procedure before assets can be removed.


The distraint processing

If you are unable to pay the outstanding amount, the HMRC field force officer will create an inventory of your company’s assets and document them on a C204 form. You will receive a copy of this form, which you must sign. As long as you cooperate, the assets will remain with your company, and you can continue using them on a day-to-day basis. The only restriction is that you cannot sell or dispose of any item listed on the C204 form. Failure to sign the form when requested may lead to escalation, and your assets could be removed immediately.

You will then have a 5-day period to either make a full payment to clear the amount owed or negotiate a time-to-pay arrangement. If you plan to enter into a payment plan, swift action is necessary for any chance of timely approval.

If the matter remains unresolved after 5 days, the field force officer will return to your premises and begin removing the assets listed on the C204 form. These will be sold at auction, with the proceeds used to settle your tax debt.


What if my company doesn’t have any assets?

If your company lacks tangible assets, such as property, vehicles, machinery, or stock, HMRC may adopt a different approach. This could involve issuing you a statutory demand or a winding-up petition. These are highly serious measures, often leading to the compulsory liquidation of your company.

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What should I do if I have been visited by an HMRC field force officer?

If you anticipate being unable to meet the requested amount within the given time, it’s crucial to take prompt action and seek advice from a licensed insolvency practitioner.

An insolvency practitioner can provide an impartial and analytical assessment of your business, advising on whether there’s a viable chance of success or if the situation is beyond rescue. They can guide you through various options, including restructuring and turnaround processes, or explore ways to close down your company on your own terms.

Vanguard Insolvency has a nationwide network of over 70 licensed insolvency practitioners with operations across more than 100 offices throughout the country. We can help you understand your current position and devise a plan for the way forward. Contact our expert team to arrange a free initial consultation. 

Senior Partner at Vanguard Insolvency Practitioners | Website | + posts

I am an insolvency professional with a distinguished career specialising in commercial insolvency, adeptly navigating Creditors Voluntary Liquidation, Company Voluntary Arrangements, and Company Administrations. With a comprehensive understanding of insolvency laws and an unwavering commitment to ethical practices.