The UK Rules
Enforcement Action

HMRC Enforcement Action in UK

HM Revenue and Customs will use enforcement action to collect the debt if you do not pay your tax bill. Find out what they can do to recover money owed and how you can avoid it.

TAX BILLS: There are several different types of enforcement actions that HMRC can take to recover taxes. As a rule, they will:

Several things might happen if you do not pay tax on time. In the first instance, you may need to pay interest on the outstanding amount. In some cases, there may also be a penalty or surcharge to pay as well.

But, there are ways to avoid HMRC enforcement action. You must contact HM Revenue and Customs if you cannot pay your tax bill on time (e.g. you missed a payment or the deadline).

Business Payment Support Service
Telephone: 0300 200 3835
Monday to Friday: 8am to 8pm
Saturday and Sunday: 8am to 4pm

Note: Anyone can use the support service (not only businesses). Once you have a Government Gateway account you may be able to set up a plan and pay off the debt online in instalments.

Avoiding HMRC Enforcement Action

If you do get into difficulty you should contact HMRC without delay. In most cases, they will arrange for you to either:

Note: HMRC can also help if you disagree with a tax decision or you want to appeal against the amount they are asking you to pay.

Deductions through Earnings or a Pension

HM Revenue and Customs have authority to make deductions from your salary or your pension to recover debts. They can apply this type of enforcement action by changing your tax code for:

Note: HMRC can take back money owed for tax credits overpayments in this way. In some cases, they may also make the deductions from Universal Credit payments.

How Much can HMRC Take?

If you earn below £30,000 HM Revenue and Customs can take up to £3,000 from your earnings. HMRC can collect higher amounts from those who earn more money - according to their salary. Earning £90,000 (or more) means that can they can take up to £17,000.

In if happens, HMRC will write to you before the beginning of the next tax year. The letter will explain how your tax code is going to change.

How to Avoid Debt being Included in Tax Code

If you do not want to have a debt included in income tax codes you will have to (either):

Debt Collection Agencies used by HMRC

HM Revenue and Customs often use a private debt collection agency to collect the money. If it happens, one of debt the collection agencies will write to you. You should pay off any debts you have 'direct' to the agency. A list of official debt collection agencies used by HMRC includes:

Distraint: Taking Control of Goods

The rules of distraint apply in England, Wales, and in Northern Ireland. It relates to the seizure of property and taking control of goods to obtain a payment of money owed.

HM Revenue and Customs can take things that you own and then sell them to pay off your debt. As a rule, you will also get charged certain fees on top.

A Visit from HMRC Officer

An HMRC officer will make a visit to see you and ask you to pay back the money you owe. The officer will make a list of the possessions that can get sold off. The list will include items to cover the debt and any associated costs of selling them. In most cases, the extra costs will cover the fees for advertising and auctioneers.

Several different things might happen to the seized possessions during the visit by the officer. They will either be:

Failing to clear the debt within seven (7) days of the visit means the goods can get sold off. You will get paid the surplus if they sell for more money than you owe. But, you would have to pay the difference if they sell for less than the amount you owe.

Enforcement Action Fees in England and Wales

Enforcement Action Fees in Northern Ireland

Taking Money from a Bank or Building Society Account

In some cases, HMRC can take money that is owing to them 'directly' from a bank account or a building society account. This ruling is 'direct recovery of debts' and it applies in England, Wales, and in Northern Ireland.

As a rule, Her Majesty's Revenue and Customs will only use direct recovery of debt as enforcement action:

Before HMRC Take Money from an Account

If HM Revenue and Customs plan on taking money from your account they will write to tell you with details on:

Using Court Action

If you get taken to court by HM Revenue and Customs it can be costly. Using court action to collect a debt can result in paying extra court fees and costs for HMRC on top of the tax owing.

Magistrates Court: England, Wales, and Northern Ireland

As a rule, HM Revenue and Customs start magistrates court proceedings against someone who owes taxes if:

You would receive a summons before the hearing takes place. The summons explains the amount you owe and the date and venue of the hearing. Paying the debt in full would mean you avoid having to go to court.

Note: Contact HMRC before the case goes to court if you disagree with the amount stated on the summons.

HM Revenue and Customs have several options available if you still fail to pay off the debt. They can ask the court to:

County Court: England and Wales

If the case goes to county court you will get a letter from the court. It will explain how much is owing and what steps you must follow.

Note: As a rule, you must go to court to explain your reasons if you disagree with the amount they say you owe.

HMRC have several options available if you still fail to pay off the debt. They can ask the court to:

Sheriff Court: Scotland

In Scotland, HM Revenue and Customs would apply to the court for a warrant to collect a debt. The debtor would have 14 days to pay from the date of the warrant.

HMRC have several options available if you still fail to pay off the debt. They can ask the court to:

HMRC Enforcement Action If You Do Not Pay Your Tax Bill in UK