Can HMRC recover foreign tax debts?
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 do you 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.
Expert London HMRC MARD Disputes Investigation Lawyers
If you need HMRC MARD Investigation advice, we are available to aid you at every stage of the HMRC investigate process. Members of our legal team have first-hand experience and knowledge of the internal workings of HMRC. We can provide you with the very best representation in negotiations with HMRC and defending all forms of HMRC fraud, tax inquiry, tax fraud investigation, criminal tax evasion and HMRC enquiries and investigations. Our team specialises in successfully challenging HMRC decisions and will assist you in every aspect of the investigation.
Our specialist Tax Solicitors and Barristers deliver expert technical knowledge, strong negotiation skills and respected advice, which can make a pronounced difference to eventual tax penalties, charges and liability.
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. Just call us on 0207 1830 529, or email [email protected].