Understand your role as a director and how to meet your legal obligations. Download our free guide today.<\/p>\n <\/div>\n \n\nDownload Now<\/a> <\/section>\n <\/div>\n\n\n\n\n If you fall into debt with HMRC they will initially send you reminder letters. However, if you still fail to pay the debt, HMRC will issue a \u2018final opportunity letter\u2019 or a notice of enforcement. Below, we look at what can follow from this as part of the HMRC debt management process.\u00a0<\/p>\n\n\n\n If you fail to pay your tax debt through the final opportunity letter or at the end of a notice of enforcement letter, HMRC will pursue the debt collection from your business. They will do this by using either a:<\/p>\n\n\n\n A Field Force or Distraction Officer is a trained employee within HMRC. They will visit your business and offer you the opportunity to pay off some of your debt. If this is not possible, you may have the option to agree on a Time to Pay (TTP) payment plan with them. This is a payment plan to provide you with extended time to get your account out of arrears. All of your HMRC debts will be included in this and should be paid off at the end of the timeframe. Furthermore, any tax accrued during the TTP payment plan should also be paid.\u00a0<\/p>\n\n\n\n Alternatively, HMRC may decide to ask a third-party debt collector to collect the debt from your company when they visit your business. In this case, the collector aims to take payment of the debt or, where this is not possible, seize your assets. They will then sell these to make a payment towards the debt you owe HMRC. <\/p>\n\n\n\n HMRC uses eight debt collection agencies. Therefore, when you are visited by a third-party collector, you should evaluate their legitimacy and ensure they have been enlisted by HMRC.<\/p>\n<\/div>\n\n\n\n Another way HMRC may manage debt is to issue a winding-up petition<\/a>, which could result in your business falling into compulsory liquidation. A winding-up petition is possible where your business owes any creditor more than \u00a3750. Once issued with one, you can no longer sell your company or any of its assets.\u00a0<\/p>\n\n\n\n Getting a winding-up petition from HMRC is something you should seek to avoid, as it may suggest that your business is being forced to close down. It may be possible to oppose the winding-up petition, but this can be a complex process. Therefore, you should seek experienced legal advice before initiating an opposition. <\/p>\n\n\n\n A potential option if you have an HMRC debt that you cannot pay is company administration. This is where company administrators examine your business situation to determine if it is in a position to continue<\/a>. This can lead to either:<\/p>\n\n\n\nHow Does HMRC Manage Their Debts? <\/h2>\n\n\n\n
HMRC Debt Collection<\/h3>\n\n\n\n
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Winding-Up Petition<\/h3>\n\n\n\n
Company Administration<\/h3>\n\n\n\n
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If you do get into debt with HMRC, they will not ignore what you owe, and as a large organisation, they have an array of enforcement measures to recover your debt. Furthermore, HMRC debt is not statute-barred, meaning there is no time limit in which they can collect outstanding debt. <\/p>\n\n\n
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\n UK Directors Duties<\/div>\n
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