Last updated: 16 October 2026
What can you do if you can’t pay HMRC and they threaten to take your goods?
Contact HMRC immediately and ask for a Time to Pay arrangement. HMRC can use “taking control of goods” (previously called distraint) to seize and sell assets to cover unpaid tax, but this is usually a last resort after letters and phone calls. A realistic payment plan agreed before enforcement starts normally stops it. If enforcement officers have already visited, call the number on their notice straight away and offer a payment proposal.
How HMRC enforcement works
- Reminder letters and calls after the deadline.
2. A final demand or notice of enforcement.
3. A visit by an HMRC enforcement officer, who lists goods (a controlled goods agreement).
4. Goods removed and sold at auction if the debt isn’t paid.
In Scotland the process is called summary warrant and diligence, and is carried out by sheriff officers.
Time to Pay
- Self Assessment debts up to £30,000 can often be set up online
- Employer PAYE debts up to £100,000 can be arranged online if returns are up to date
- Larger debts need a call and detailed income and spending figures
- Interest continues to run at Bank Rate plus 4%
What goods can be taken?
| Usually exempt | Can be taken |
| Tools of the trade up to £1,350 | Vehicles not needed for work |
| Basic household items | Stock |
| Clothing and bedding | Equipment beyond the exemption |
| Items owned by others | Valuables |
Other HMRC powers
- Direct recovery of debts from bank accounts (for debts over £1,000, leaving at least £5,000)
- County court action
- Bankruptcy or winding up petitions
- Adjusting your PAYE tax code to collect debts (up to £3,000 for most people, and up to £17,000 for higher earners)
Example
Lee, a builder, owes £14,000 in Self Assessment after a slow year. He ignores letters until an enforcement notice arrives. He calls HMRC, shows his monthly income and outgoings, and agrees to pay £1,200 a month over 12 months. The enforcement action is put on hold as long as he keeps up the payments and files his next return on time.
Common mistakes
- Waiting until officers arrive before contacting HMRC
- Offering a plan you can’t keep up
- Missing new tax payments during the arrangement
- Not getting advice on insolvency options
Records to keep
Keep copies of letters, call notes with dates and names, and your Time to Pay agreement.
What to prepare before calling HMRC
Have your UTR or PAYE reference, the amount owed, your monthly income and essential spending, and a proposal for how much you can pay each month. HMRC will want to know why the bill wasn’t paid, what you have done to raise money, and how you will keep future tax up to date. Being prepared usually makes the call quicker and the plan more likely to be accepted.
Frequently asked questions
Can enforcement officers force entry?
Not usually for HMRC debts at a home, except in limited circumstances.
Will Time to Pay affect my credit rating?
Not directly.
Can I get penalties removed?
Only with a reasonable excuse.
What if I can’t afford anything?
Speak to a debt adviser or accountant about the options.
Planning ahead
Set aside a percentage of every payment you receive for tax, so the January and July bills don’t take you by surprise. Consider budget payment plans to spread Self Assessment payments.
Related: struggling to pay your tax bill, quarterly PAYE payments and tax after a company closes.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with HMRC debt and time to pay help. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 16 October 2026. It is not personal advice, so speak to an accountant about your own situation.
