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DMBM656340 | Enforcement action: distraint: costs and accounting: accounting for costs and LOMR / MIS

From HM Revenue & Customs · Debt Management and Banking Manual

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Types of distraint costs

Distraint costs are classified as chargeable or non chargeable.

Chargeable costs - to be recorded on SAFE

Only chargeable costs are recorded on SAFE.

These are costs HMRC charges the debtor for

  • levy

  • possession.

They are called chargeable costs because they can be recovered from the debtor, if necessary through enforcement proceedings.

Recording chargeable costs on SAFE

To create a distraint cost charge on SAFE

  • follow the link http://intranet.active.hmrci/finance/guidance/safe/work_inst/tr_tm_050_hm.htm

Non chargeable costs - NOT to be recorded on SAFE

Non chargeable costs can be

  • costs charged to HMRC by the bailiff or auctioneer for

  • attendance fees

  • setting up fees

  • costs charged to the debtor by the auctioneer for

  • appraisal

  • removal

  • storage

  • sale

  • advertising.

Although non chargeable costs are not recorded on SAFE, you must keep a record of them. This is because Finance needs to know the amount that HMRC has paid for costs which it cannot charge the debtor.

Keeping a record of non chargeable costs

  • Keep a manual or electronic record on non chargeable costs.

Guidance on reporting them will be issued before each Interim Balance.

Additional record keeping - LOMR / MIS

There is still a requirement to record and keep information for LOMR and MIS.

So long as you keep the information, any form of recording is acceptable.