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If you receive any type of HMRC warning of enforcement action - it is always best to deal with it quickly. Failure to do so can lead to much bigger problems. Our brilliant team have been advising on HMRC issues since 2002. Let us help you too.

A warning of enforcement action by HMRC is something not to be taken lightly – where you or your company owes unpaid tax or are party to a tax avoidance scheme which has aroused the suspicion of HMRC, you will receive a notice providing you a final opportunity to pay or explain your circumstances.

For a notice of enforcement, this often refers to distraint over goods, otherwise it may be in respect of VAT security required, a personal liability notice or anti-avoidance investigations into a purported tax avoidance scheme.

  • where such a warning notice is received, this should not be ignored as ignorance will not delay the enquiries and (dependent on what the letter addresses) HMRC will not cease enforcement of the liability.
  • ultimately, enforcement will lead to a company’s liquidation or personal bankruptcy, or potentially both for directors.

One of the most common examples is an assessment of taxes due where no returns have been filed. HMRC will often use comparative data from similar periods of a business’ trading history to assess such liabilities. However, it may be that the business is not doing so well, there are trading issues or it has ceased to trade – in which case the taxes due may be considerably smaller.

If you face this situation, the most important step is likely to seek insolvency advice and, if you are a director of a company, place it into administration or liquidation to prevent matters escalating and further consequences arising for you personally. Our company rescue experts might be able to avoid insolvency completely.

  • similarly, with regard to personal liability notices, as the sum eventually demanded is determined by the circumstances, it is important to put HMRC on notice of all relevant factors to consider, in a similar way to which the parties are encouraged to exchange information before any litigation claim is issued at court.
  • where HMRC commences enquiries into a disguised remuneration tax avoidance scheme, representations can be made to HMRC (particularly where demands for VAT security and accelerated payment notices exist) and, in the event a tax avoidance scheme is disclosed then the incentive for cooperation is that HMRC may not prosecute you and your representations may reduce the tax charge.
  • if no such representations are made, or you do not cooperate, then HMRC can impose substantial penalties, interest charges and surcharges which can mean your liability is over double what it would have been originally and ultimately insolvency proceedings will always be commenced.

At Francis Wilks & Jones we have considerable experience of negotiations with HMRC, including accelerated payment notices, personal liability notices, VAT security or any other claim – including appeals to tax tribunals or insolvency claims by liquidators and defending director disqualification claims.

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