Overdue VAT Payment - HMRC Debt Management Letter

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Updated: 12th April 2021

Understanding an overdue VAT payment letter from HMRC and what you should do next


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Please pay £XXX. We recently wrote to you about the business’s overdue VAT payment. Our records show that the amount shown is still overdue and that your business has previously defaulted in the past twelve months.

If you do not pay or contact us, we can visit your premises in order to arrange for assets to be sold by public auction as the law allows

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HMRC Overdue VAT 


If your company has failed to pay its Value Added Tax (VAT) bill, HMRC will soon become rather demanding. This letter indicates their frustration at waiting to be paid and shows that distraint is the next step in the process. This is where HMRC send an officer to your business premises to serve you a distraint notice – notifying you of their intention to return and seize assets so that they can be sold at public auction with the proceeds going towards your VAT bill.

At that stage, there is no legal requirement to let anyone from the tax office or a debt collection agency into your home or premises on the back of a distraint warning – the only way they can enter is with a court authorisation in the form of a warrant which may come later should you still fail to pay. Only then can they enter into your property and remove items which will be sold to clear your debt.

If you’re struggling to pay your VAT, it’s best that you talk to a licensed insolvency practitioner as soon as possible – you can do this free of charge in a one-to-one setting at your nearest Real Business Rescue office.

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