COM112010 - Pursuit: enforcement: enforcement action
This subject is presented as follows
General
The criteria and limitations which condition the type of enforcement action appropriate in a given case are outlined in the Enforcement Office Manual and DMB memos. In addition you can take enforcement in the Magistrates' Court (Word 29KB).
You may in certain circumstances need to refer the AP(s) to EIS (Enforcement & Insolvency Service).
You must make sure thatpayment has been applied for from the company in all cases before starting enforcement proceedings. The payment application should include
- Both COTAX and non COTAX liabilities, where applicable
- Any net Debit interest (Word 31KB) and late payment interest (Word 27KB) accrued to the date of issue
Where the company's name has been abbreviated on the computer because it is more than 56 characters long or includes characters which COTAX cannot accept you will, for companies set up after the 11 October 2010, be able to see the full name in the notes in Function VTPR (View Taxpayers Record). If the company record was set up before this date the owning office will advise you of the full name on form C87-3. You must use the full name in all communications with the company and on all forms relating to the proceedings.
Notes:
1. |
You must not take any enforcement action to recover a Quarterly Instalment Payment (Word 42KB) in advance of a charge to tax |
2. |
You can start enforcement action to recover a Quarterly Instalment Payment case for an AP that ends on or after 01/07/02 where the tax charge has been recorded and the final instalment due date has passed |
3. |
An outstanding amount over £100,000 could have been made LA (Word 28KB) before the due date (Word 49KB) because the return had been delivered early and the PLA signal has been set to ‘Y’. In such cases no payment applications may have been issued |
Revenue Determination superseded by a self assessment
After a Revenue Determination (Word 29KB) has been made the company may deliver a late return. The owning office will advise the Debt Management Office by telephone if
- It accepts the late return and supersedes the Revenue Determination by the self assessment
- The LA-ENF (Word 27KB) signal is set to 'Y'
In these cases proceedings may be continued for the unpaid balance already the subject of enforcement action.
Interest
Credit interest (Word 34KB) and Debit interest (Debit interest can only arise on Quarterly Instalment Payment (Word 42KB) cases) is automatically calculated when the normal due date has passed, a tax charge is recorded and the Credit / Debit Interest Indicator (CDII) (Word 29KB) signal is not set. For more information on how to raise a manual interest charge see section 'How interest is calculated' (COM80000) in business area ‘Interest’. Late payment interest accrues on all COTAX liabilities from the normal due date (except penalties and interest itself) until the liability is cleared.
Note: Interest does not stop accruing on the date enforcement action is started. You therefore should not raise a late payment interest charge until the liability has been cleared in full.
Transfer of recovery responsibility
A Debt Management Office - Recovery Section may ask another Debt Management Office to carry out a personal call but ownership should remain in the original Debt Management Office.
If recovery is to be carried out by another Debt Management Office, you should transfer ownership to that Debt Management Office.
Notes:
1. |
Debt Management Offices should not transfer periods of responsibilities because IDMS only recognises one Debt Management Office (including EIS (Enforcement & Insolvency Service)) as being responsible for all unpaid liabilities for a Head of Duty for a particular company |
2. |
Whenever practical, all arrears due from a company which are working locally are transferred at the same time |
3. |
You must bear in mind the important principle that in England and Wales, where County Court proceedings may be necessary, a defendant must not be summoned to a distant court |
For more information see section 'Case Ownership' (COM41000) in business area ‘Case Records’.
Entries on work lists will then be transferred to the new office automatically. The entry on IDMS will also need to be transferred to the new office.
Payment allocation
The COTAX system allocates payment of liabilities following the automatic payment allocation rules (Word 40KB).
If this is likely to cause problems in a proceedings case, you should allocate or reallocate payments accordingly.
To ensure the correct allocation, follow the procedures in section 'Processing Payments' (COM90000) in the ‘Payments’ business area.
For a list of forms relevant to this subject, see COM112011.
For a list of functions to use in particular situations, see COM112012.
For legislation applying to this subject, see COM112013.
