HMRC distraint – a clarification

In our Blog posting on 8 October we advised you about an apparent change in HMRC policy towards distraint and indicated that where there was ongoing distraint action or threats of distraint action by HMRC you should take appropriate steps to preserve the company’s assets for the benefit of the creditors as a whole. We indicated that such action could include obtaining instructions from the Board of Directors to appoint agents to remove the company’s assets, but clearly such action would only be appropriate where there was a threat of distraint and not where distraint action was actually being taken. Removing assets where there is ongoing distraint action is likely to lead to legal action being taken against you by HMRC for pound breach or breach of walking possession. Where there is an ongoing distraint then trying to negotiate is about the only option available to you.