HMRC has the power to take control of goods to recover unpaid tax debts.
This power is exercised under the Taking Control of Goods Regulations 2013. It allows HMRC enforcement officers to attend business premises, secure goods and, if necessary, sell them to satisfy outstanding tax liabilities.
If you receive a Notice of Enforcement or HMRC attends your premises, the situation requires immediate attention.
What is “taking control of goods”?
Taking control of goods replaced the old process known as distraint.
After issuing a Notice of Enforcement, HMRC may attend your trading premises to identify goods belonging to the debtor. These goods may be listed and secured under a controlled goods agreement. If payment is not made, HMRC can remove and sell the goods.
This action is intended to recover unpaid VAT, PAYE, Corporation Tax or other liabilities.
What happens before HMRC attends your premises?
Enforcement usually follows a structured sequence.
First, HMRC issues a Notice of Enforcement giving a minimum period of notice before attendance. During this stage, additional enforcement fees may begin to accrue.
If payment is not made or an agreement is not reached, an enforcement officer may visit the premises.
Responding at the notice stage is significantly easier than dealing with enforcement after goods have been listed.
What are the risks to your business?
Removal of goods can be operationally damaging.
Where stock, vehicles, tools or plant and machinery are essential to ongoing trading, their removal may prevent the business from continuing. Enforcement fees and storage costs are added to the debt, increasing overall liability.
The commercial impact can escalate quickly if customers or suppliers become aware of enforcement activity.
Can enforcement be stopped?
In some circumstances, yes.
HMRC may agree to suspend enforcement action where:
- The debt is paid in full
- A credible Time to Pay arrangement is agreed
- There is evidence that the assessment is incorrect
- Formal restructuring proposals are being implemented
Engagement must be realistic. Proposals that cannot be met are likely to lead to resumed enforcement.
What if payment is not possible?
If the business cannot meet its tax liabilities, enforcement action may escalate.
This can include County Court proceedings, bankruptcy petitions for individuals or winding up petitions for companies.
At that stage, directors must carefully consider their duties and the viability of continued trading.
Act early – take control yourself
Taking control of goods is a serious enforcement step but it is not the first stage of HMRC recovery.
Early engagement at notice stage provides the best opportunity to avoid seizure and sale of assets. Once enforcement officers have attended and listed goods, options become narrower and costs increase.
If HMRC is threatening or has commenced taking control of goods, structured advice at an early stage can help stabilise the position and prevent further escalation.
Contact our tax disputes team today for immediate assistance. We have been helping businesses and individuals for 25 years.
FWJ did precisely what it set out to do. I am extremely grateful for its assistance.
A client who had received a Request for Security from HMRC for a sum that would have caused their company severe financial difficulties. We helped them to have the entire bill withdrawn
