HMRC have substantial powers to recover unpaid tax and VAT liabilities and this includes the seizure of assets. Whilst this is used as a means of last resort, HMRC appear to be increasingly aggressive in using this method of debt recovery, as asset seizures by HMRC are up 145% (to 1,592 assets) over the last year.
It is important to understand your rights when served with an Enforcement Notice by HMRC Enforcement Officers. Once the notice has been served, you have a choice of paying the debt in full, or negotiating a Time to Pay arrangement.
Businesses are given seven days following a visit from a bailiff to pay their overdue tax before their assets are seized.
Ignoring the notice, or taking too long to act, will result in HMRC Enforcement Officers or bailiffs arriving at your premises to recover goods to the value of the debt under a Controlled Goods Agreement.
It is important at this stage to consult your adviser to fully understand how to proceed.
As a trial, HMRC have also recently started to send “nudging” SMS text messages to taxpayers who are late with their payments. The messages increase in level of severity and can become quite threatening in nature. It is relatively cheap to send these messages and HMRC have seen a reasonable level of success with this tactic. It is therefore likely that the trial will be extended.
Importantly, taxpayers should note that HMRC will never send a text message or email giving notification of a tax refund or of penalties. Such messages will inevitably be phishing attempts by fraudsters and should be sent on to email@example.com.
Finally, HMRC have started to stick handwritten Post-it notes on letters to tax avoiders in a bid to encourage them to pay the tax being demanded.
This is a behavioural psychology tactic, imported from the US, and HMRC claims a high rate of response.
The Post-it notes have only been placed on letters to users of tax avoidance schemes and not to anyone else.
The US study indicates that people are more likely to respond to message indicating extra effort and a personal touch. However, being on the receiving end of extra personal attention from HMRC might be considered to be somewhat sinister.
Source - Gibson Whitter