DMBM605420 - Pre-enforcement: preparing a case for enforcement: Enforcement and Insolvency criteria: general considerations

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Considerations before taking any enforcement and insolvency action (excluding Tax Credits and Child Benefit)

Before considering enforcement or insolvency

  • the tax must be overdue and unpaid
  • Quality Gateway checks must have been carried out
  • the debt must not be the subject of dispute or appeal (though this is not a bar to recovery action in enquiry cases involving avoidance schemes or arrangements which may still have ongoing open enquiries - see DMBM605120). For guidance on which indirect tax debts are enforceable and which are not, see DMBM530930. The unenforceable debts should then be suspended, for information on this, see DMBM531500.
  • there must be no Time To Pay arrangement in place and the option of agreeing TTP must have been considered, or is not appropriate and any failed arrangement must have been cancelled in writing
  • the customer’s address must be in the UK and confirmed, ideally, within the last six months. However, if this has not been confirmed within the last six months, consider a distraint or Field Force AO call
  • consider whether there are any special considerations about the debtor, for example trusts or executors (see DMBM585000 to DMBM585230)
  • for debts that are not tax or interest (for example Contract Settlements or Class 2 NICs) there must be less than six years from the statutory due date of the liability to starting proceedings, for details see DMBM665210 
  • a Voluntary Arrangement must not have been proposed.

Review the customer’s ability to pay. Factors affecting their ability to deal with the debt may include

  • mental ill health
  • serious ill health
  • extreme old age of customer
  • imprisonment

Look at the customer’s ability to pay and where you consider that such a case is suitable for enforcement include these facts in the referral.

In all cases where insolvency might attract adverse publicity, such as football teams, famous personalities, popular charities, education, health care, the public sector or major blue-chip companies, highlight these factors in the referral.

If a confiscation order is in place contact your manager for guidance.

For guidance on insolvency selection criteria see DMBM685100.