DMBM560015 - Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (EU States): about the agreement
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What is MARD?
MARD (Mutual Assistance in the Recovery of Debt) is an arrangement which allows a relevant authority in another country to ask HMRC for assistance in either:
- obtaining information
- serving legal documents
- recovering a tax or duty debt
where the defaulting taxpayer is living in, or has assets in, the UK. There are a number of different MARD arrangements in place, but all are reciprocal.
This guidance refers only to the arrangements with members of the European Union (EU) for tax and duty debts. These will continue to apply to the U.K. after 31st December 2020 under the terms of the Withdrawal Agreement and the Northern Ireland Protocol.
For information on the MARD arrangements with countries that are outside the EU, see DMBM560200. For information on the MARD arrangements under the EU Social Security Regulation, see DMBM560500.
The law and regulations
The EU legislation is:
- EU Council Directive 2010/24/EU of 16 March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures
- EU Commission Regulation 1189/2011 of 19 November 2011.
- EU Commission Decision C(2011) 8193 of 18 November 2011
Although the UK is no longer an EU member state, the EU legislation will continue to apply to the UK in certain circumstances. How long it will continue to apply for and in what circumstances will depend on whether the request for assistance is made under:
- Article 100 of the Withdrawal Agreement;
- Article 5 (4) of the Northern Ireland Protocol; or
- Article 8 of the Northern Irelnad Protocol.
The UK legislation is:
- Finance Act 2011 (section 87 & schedule 25)
- SI 2011 No. 2931 - The MARD Regulations 2011.
- SI 2020 No 996 - The MARD (Amendment) (EU Exit) Regulations 2020.
Countries covered
The arrangements apply to EU member states. For more information about the countries covered, see Helpcard MARD01.
Debts covered
The MARD provisions cover the following.
- All taxes and duties collected by HMRC.
- All regional and local taxes administered by local authorities or the devolved administrations (that is, the Scottish Parliament, the National Assembly for Wales or the Northern Ireland Assembly).
- Agricultural levies (refunds, interventions and other measures forming part of the system of total or partial financing of the European Agricultural Guarantee Fund (EAGF) and the European Agricultural Fund for Rural Development (EAFRD), including sums to be collected in connection with these actions, and levies and other duties provided for under the common organisation of the market for the sugar sector) (administered by DEFRA and the devolved administrations).
- Road tax (administered by the DVLA).
- Any other tax or duty collected by any National or Local Government Department (including the devolved authorities).
- Associated interest, administrative penalties and surcharge, and costs.
- Fees for certificates and similar documents issued in connection with administrative procedures related to taxes and duties.
Where the debt either became due:
- before 1st January 2021; or
- after 31st December 2020 but relates to a transaction that took place before 1st January 2021.
It also covers:
- VAT due on goods where the debt relates to:
- a dispatch or transport which started before 1st January 2021 but ended after 31 December 2020; or
- a supply in Northern Ireland after 1st January 2021.
- Excise duty due on energy products and electricity (including hydrocarbon oils); alcohol and alcoholic beverages; or manufactured tobacco, where the debt relates to:
- a movement which started before 1st January 2021 but ended after 31st December 2020; or
- a movement in Northern Ireland after 1st January 2021.
- Customs Duty arising in Northern Ireland after 1st January 2021.
Debts not covered
- National Insurance Contribution debts (these are covered by the EU Social Security Regulation instead).
- Student loan recoveries.
- Family benefit debts - which are Child Tax Credit overpayments, Child Benefit overpayments and Guardian allowance overpayments (these are covered by the EU Social Security Regulation instead).
- Working tax credit overpayments.
- Any other fees that are not listed above - debts covered.
- Anything of a contractual nature, such as consideration for public utilities (for instance water bills in Scotland).
- Criminal penalties.
Types of requests
There are four different types of requests.
Requests for |
Action required |
|---|---|
Information |
Checking addresses, details of employment and assets of the debtor, a person liable to settle the claim or a third party holding assets, and establishing if further action is cost effective. |
Notification |
Arranging for the service of legal documents. |
Recovery |
Pursuing payment from the debtor, a person liable to settle the claim or a third party holding assets, using normal recovery procedures. |
Precautionary measures |
Protecting a claim by for example seizing assets or freezing bank accounts. |
Exchange of information without prior request
Member states may tell each other about tax or duty refunds (except VAT refunds) that they intend to pay to a person or company resident or established in that other state, without that other state making a formal request for the information.
It is only possible to set off such refunds against a debt of another member state if a recovery request is received before the refund is made. On no account should payment of the refund be delayed pending the receipt of a recovery request from the member state of residence/establishment.
Presence of officials from other member states
If both the applicant and requested member state agree, an official of the applicant member state can:
- be present in the administrative office of the requested member state
- be present during administrative enquiries carried out in the requested member state and if the law of the requested member state allows, interview individuals and examine records
- assist during court proceedings in the requested member state.
Any such official must at all times during the visit be able to produce written authority stating their identity and their official capacity.
Data protection
Information exchanged under this agreement in any form is covered by the obligation of official secrecy and enjoys the same protection extended to similar information under the national law of the requested member state.
The information exchanged may be used to recover the debt referred, apply precautionary measures, or to assess and enforce compulsory social security contributions. It may also be used as evidence by all authorities within the requested member state on the same basis as similar information obtained within that state.