The powers of bailiffs to enter a property to seize goods where a debt has not been repaid are often exaggerated.
But I’m equally sure that some less scrupulous bailiffs have played on debtors’ ignorance of what is and is not permitted.
One of the ways in which the new regulation of the collections industry has brought clarity to both sides is in the clear statement of what is, and is not, permitted. You can read this in full on the government’s website. There’s even a link to advice on how to complain if your believe bailiffs have overstepped the mark.
The first thing to remember is that a bailiff or enforcement agent must normally give seven days’ notice before making a first visit to the property of someone who, for example, has failed to pay a council tax bill, parking fine, court fine, county court or family court Judgment.
In most cases you don’t have to let a bailiff in, and they can’t put their foot in the door and force their way in.
But if you don’t let them in or agree to pay them, the page on www.gov.uk states that:
- They could take things from outside your home
- You could end up owing even more money
That could mean your car disappearing down the road on the back of a lorry.
Equally, if you let them in, but don’t pay up, the government makes clear that may take some of your belongings which could be sold to pay the debt and cover their fees.
So what are the exception that allow a bailiff to force entry? The government website states that: ‘Bailiffs are allowed to force their way into your home to collect unpaid criminal fines, Income Tax or Stamp Duty, but only as a last resort.’
But as we’ve said before, under the new rules, they cannot:
- enter your home if only children or vulnerable people are present
- enter your home between 9pm and 6am
- enter your home through anything except the door
There’s another way, controversial, in which H M Revenue & Customs will soon be able to go about the collection of unpaid Income Tax.
This is the plan by Chancellor George Osborne to allow the money to be taken directly from your bank account.
A quick search on the internet reveals that the proposal has angered MPs on the all-party Treasury select committee, a firm of insolvency experts in the north-east and a columnist on the Glasgow Evening Times, which is a pretty catholic bunch.
Judge, jury and executioner
The accusation is that HMRC will be judge, jury and executioner in this tax grab, starting in 12 months’ time.
The select committee said: ‘This policy is highly dependent on HMRC’s ability accurately to determine which taxpayers owe money and what amounts they owe, an ability not always demonstrated in the past.
Eamonn Wall, the boss of County Durham insolvency expert Robson Green, raised concerns about the potential impact on SMEs. He was quoted by Bdaily website: ‘These proposals, which were announced in the Budget small print, could have a devastating effect on businesses. The first they might know would be when bank balances are checked and they realise the money has been taken.
‘It’s not difficult to see how the unanticipated removal of cash could quite quickly force the demise of a business that may otherwise have been able to reverse a temporary cash flow glitch. It is likely to be the spark that lights a full blown insolvency.’
Insolvency reform 12 years ago ended the Inland Revenue’s preferential status giving it priority over assets in liquidations, administrations and bankruptcies. Osborne’s policy appears to restore that by stealth, say critics.
The idea appears to be that the tax inspectors will give the money back if they turn out to be wrong. But it might be too late for a business and costly for an ordinary taxpayer.
David Stirling, columnist with the Glasgow paper, was equally forthright about what it might mean for individuals who pay tax through the Paye system. He wrote: ‘It will matter not a jot that it’s a joint account and one partner owes them not a penny. It will matter not a jot if that joint account is a pensioner’s, managed by a younger relative. If HMRC believes the relative owes them money, the pensioner’s savings could go.
‘Osborne expects to seize £375 million over four years, targeting 17,000 people who owe an average £5,800 in tax. And his partner in crime, PM David Cameron, has the brass neck to threaten a tax rise without that money. £375 million over four years? It’s the tip of a toxic Tory taxberg.’
Strong stuff. Makes worries about the powers of bailiffs look small potatoes.