Recovery of EU Taxes by HMRC (MARD)
Whilst it used to be a rule of English common law that the courts would not enforce the tax laws of other countries (see Government of India, Ministry of Finance v Taylor AC 1955) it has become a rather qualified rule by virtue in particular of the Mutual Assistance Recovery Directive 2008/55/EC as implemented by section 134 and Schedule 39 of the Finance Act 2002 and various regulations made under that Schedule.
Under that Directive HMRC can now recover amounts in the UK in respect of which a request for enforcement has been made in accordance with the Directive by a tax authority in another European member state.
What is MARD?
MARD is a the EU Tax Authorities tool in collecting taxes from businesses or individuals moving from one country to another. MARD is an arrangement which allows certain countries to ask HMRC for assistance in obtaining information, serving legal documents or recovering a tax or duty debt where the defaulting taxpayer is living in the UK.
The countries which are a part of this reciprocal arrangement are: Austria, Germany, Poland, Belgium, Greece, Portugal, (including the Azores and Maderia), Bulgaria, Hungary, Republic of Ireland, Cyprus, Italy, Romania, Czech Republic, Latvia, Slovakia, Denmark, Lithuania, Slovenia, Estonia, Luxembourg, Spain (including the Balearic Islands), Finland, Malta, Sweden, France and the Netherlands.
What actions can HMRC take?
All foreign tax debts referred to HMRC under these arrangements are recovered through the same debt enforcement methods as UK income tax debts. HMRC can therefore take the same legal proceedings in relation to enforcement as they would have done if the tax debt arose in the UK and was payable to HMRC. However there are strict rules and guidance which HMRC must follow in order to collect the debt for the foreign tax authority.
HMRC now have a specialist team of Tax Debt Collectors based in Bradford and known as the Mutual Assistance in the Recovery of Debt (MARD) team which operates as part of the more well known HMRC Debt Management department.
How to challenge HMRC’s MARD Letter:
Our Tax Solicitors and Barristers are regularly instructed to act for clients whom are facing MARD distress and enforcement proceedings and demands from HMRC. We adopt a bespoke approach on these matters depending on our client’s individual needs. Depending on the specifics of the case, we may be able to negotiate with HMRC and/or legally challenge the debt and/or the enforcement action taken under the Directive. If you are facing action from the HMRC MARD team do not hesitate to contact us for legal advice.
Our Tax Disputes Solicitors & Barristers are available to give information and advice to assist you in challenging the actions of HMRC on behalf of another EU member state. To contact one of our specialist Tax Lawyers please complete a legal assessment enquiry form by clicking here or call us on 02071830529.
Call us on ☎ 02071830529 or email us on for more information about the legal services we provide. Our team of London lawyers are based in Middle Temple adjacent to the Royal Courts of Justice. We are committed to providing professional and specialist legal advice.