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What are the powers of a HMRC field force officer?

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

If you fail to settle HMRC debts, a HMRC field force officer could visit your premises to formally request payment. They will collect overdue tax either in the form of a lump sum, or instalments. If you fail to comply, they have the right to seize company assets and sell them to raise funds.

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

Also known as a distraint officer, a HMRC field force officer is used when a company fails to keep up with their obligations to HMRC and subsequently accrues VAT or other tax arrears.

They will visit your premises if you have fallen behind on paying your taxes or have failed to keep up with an agreed time to pay arrangement. HMRC will try to deal with these issues over the phone and through other forms of correspondence before they send an officer out to your premises. It is only if they have failed to secure payment, or if you have otherwise refused to cooperate with them that they will move onto this step. That said, you will usually be given no prior warning that the visit is due to take place.

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What happens during a visit from a field force officer?

Their primary task will be to check they have the correct address for your business and that they are speaking to the right person. Once they have clarified this information, they will formally ask you to make payment for the amount you owe.

Is a field force officer the same as a bailiff?

A field force officer is only used to deal with HMRC arrears, whereas a bailiff can be employed to secure payment for a whole range of personal and business debts. A lot of people typically find HMRC field force agents to be less abrupt than bailiffs and in many cases more reasonable and more understand of their situation.

A field force officer’s primary concern will be getting you to pay what you owe either through an up-front full payment, or alternatively you may be able to negotiate a payment plan which would allow you to clear your debt through a series of instalments.

However, should this not be possible, then like bailiffs, field force officers do have the power to seize company assets and sell them in order to settle outstanding HMRC debts. This is known as ‘distraint’ and a strict process must be followed before assets can be removed.

The distraint processing

If you are unable to pay the amount you have outstanding, the HMRC field force officer will make an inventory of the assets your company has and record these on a C204 form. You will be given a copy of this form which you will need to sign. So long as you cooperate with this, then the assets will remain with your company and you will be allow to continue to use them on a day to day basis. The only restriction imposed on you is that you are not permitted to sell or otherwise dispose of any item listed on the C204 form. Failure to sign the form when requested could see the matter escalated, and your assets removed immediately.

You will then be given a period of 5 days during which you must either make a full payment to clear the amount you owe, or negotiate a time to pay arrangement. If you feel you will need to enter into a payment plan then you must take swift action if you are to stand any chance of having this approved in time.

Should the matter still be unresolved once the 5 days are up, then the field force officer will come to your premises once again and begin removing the assets listed on the C204 form. These will then be sold at auction, and the money raised will be used to clear your tax debt.

What if my company doesn’t have any assets?

If your company does not have any tangible assets such as property, vehicles, machinery, or stock, then you may find HMRC take a different approach. This could involve issuing you with a statutory demand or a winding up petition. These are extremely serious steps and the end result is usually the forced liquidation of your company.

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

If you know that you are going to be unable to pay the amount requested in time, you need to take swift action and consult a licensed insolvency practitioner.

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An insolvency practitioner will be able to take an impartial and analytical look at your business and advise whether the company has a viable chance of success or whether it is unfortunately beyond rescue. They will be able to talk you through the range of options which may be open to you, including various restructuring and turnaround processes, or alternatively look at ways of closing down your company on your own terms.

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