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UK-Justice
UK-Justice, Barrister
Category: Law
Satisfied Customers: 16193
Experience:  Called to the Bar in 2007
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I have a question regarding distraint proceedings from HMRC. One

Customer Question

I have a question regarding distraint proceedings from HMRC.

One of my businesses is behind in PAYE and VAT payments. Although a payment arrangement is in place to clear old debt, which has been paid every week for nearly a year, the current debt has built up and we've had calls, visits and letters from HMRC.

They've threatened distraint, which in financial terms makes no sense from their point of view as if they do that I'll stop the weekly payments plus the business will not be able to trade, so therefore no chance of paying any debt whatsoever. The value of the goods they'd seize would only be £2k or £3k at most, with the debt being much greater than that.

But HMRC seem to take a different view - they want to stop you trading so as the debt doesn't get any bigger.

One option is I simply close the business. By that method I could sublet the space and somebody else could start a new company, perhaps using that equipment if a person wanted to take on the same kind of business.

So my first question is, if one day I just locked the doors and ceased trading, would HMRC PAYE or VAT have the authority to break in and seize any stock, equipment, etc?

My 2nd question is, could HMRC come after me personally as the director of the Ltd Company for the PAYE or VAT debt?
Submitted: 3 years ago.
Category: Law
Expert:  UK-Justice replied 3 years ago.
Thanks for your question, I will do whatever I can to help you. Please remember to rate my answer SMILEY FACE OR ABOVE.

If it is a commercial property then yes they can break it,

If it is was private dwelling then no they can not break in, but you are commercial.

If you a director of the ltd company then no, you are not personally liable in terms of vat.

However in terms of PAYE if hmrc feel it is because of a directors negligence then they can issue a personal liability notice.

This would then make you liable. But they have to show neeligence.

Please also see

http://www.b2businesshub.com/public/understand-your-personal-liability-arrears-paye-and-national-insurance

I hope this helps.



Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
Customer: replied 3 years ago.


Thank you for this.


 


With regard to PAYE, we've been paying £650 a week, so contributions on the old debt has been provided for almost a year. Additionally, I take no salary from this business, in fact I am a creditor as I've put personal money into it. I doubt therefore they would have a case to bring against me.


 


Concerning that the VAT people can break in though. Presumably they must leave it secure?


 


But if common sense prevails they know they'd stand a better chance of getting more than the value of the assets by not stripping it.


 


 

Expert:  UK-Justice replied 3 years ago.
Yes, it would have to be left secure.

As for common sense I am saying they have the legal power.

Whether or not they use it is another matter.



Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
Customer: replied 3 years ago.


Thank you UK-Justice. That's a typical solictor/lawyer/barrister answer . . . .

Attachments are only available to registered users.

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Expert:  UK-Justice replied 3 years ago.
Thanks - please remember to give my answer a good rating!



Please remember to click *** OK SERVICE *** or above so that I am credited for my time. The question does not close and you can ask follow ups.

Important: If you feel the need to rate as one of the lower two scores, it counts as negative feedback so please reply to me via the REPLY with any further questions you may have. I will be happy to assist you further.
Expert:  UK-Justice replied 3 years ago.
I'm just following up with you to see how everything is going. Did my answer help?

UK-Justice

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