What is distraint?

The process whereby the Revenue may take possession of your goods and sell it at an auction is called Distraint. A court order is not required, as the collector has the legal power to authorise this. There is a short period of roughly five days between the time that the collector shows up at the property, and the time that the goods are removed for sale.

Collectors are bound by several legal rules so you need not fear that they will behave in an improper way. Do not ignore threats of distraint by collectors and be aware that your cooperation will help not only them, but you as well. The collector needs your permission to enter the premises and can only force his way inside with a court order. These are very hard to get. Very few distraint visits lead to actual sales at auction.

The collector’s arrival

There is no set time for the collector’s arrival. It can be at any time between sunrise and sunset and may happen on any day except a Sunday or a bank or public holiday. The collector may warn you that he will be visiting your property but does not need to make an appointment for a specific time that suits you. He might arrive at a time that fits in with his diary and may bring a private bailiff along who can advise on the value of your goods. Forced entry is not a possibility without a court order but barring the collector access does not mean the distraint process is over. This is a wake up call and should give you time to straighten out your affairs by submitting any outstanding tax returns.

The collector will advise you what amount of tax is still owed and will give you a chance to pay it. If you do not pay, you face the possibility of seizure.

Helpful tips

You may disagree with the collector on the amount of tax you believe is owed. It is true that the collector, if he is already in your home, will not be in a position to negotiate and therefore it is your responsibility to dispute the amounts with the Revenue.

It may be in your best interest not to let the collector inside your property. This will give you time to contact the Revenue and get a clearer understanding of what might be wrong.

What is seizure?

Seizure is the process whereby the collector assesses the value of the goods in your property with the help of a private bailiff, and compiles a list of items to be auctioned off. The money raised at this auction will settle the tax debts.

Normally, the collector will ask you to sign an agreement, also known as a walking possession agreement, which gives you five days to settle the debt or make a good offer to pay. The collector may return after this period, remove the goods on the distraint notice and inventory, and put it up for sale. The walking possession agreement does not allow the selling or removal of the goods on the list.

What items are exempt from distraint?

There are a number of items that are exempt from distraint. These items may not be seized by the collector. These items are the following:

* Goods owned by someone else, or jointly owned goods
* Perishable food, beds and bedding, clothes
* Livestock
* Tools of your trade
* Goods under a hire purchase agreement
* Goods hired to, or by, you
* Fixtures and fittings which, if removed, would cause damage to the fabric of the building
* Loose money

Helpful tips

If you live with someone, it is easy to have many more possessions declared exempt from seizure. These would be goods that belong to someone else living with you, or which are jointly owned. It is not always necessary to have documents proving that the goods belong to someone else. It may be enough to point out the goods which belong to someone else or which are jointly owned, to the collector. You could point out that you received something as a wedding present or that another member of your family received an item as a birthday present. The collector should accept that these goods are exempt from seizure.

Collectors normally look for items of particular value when they visit your home. These might be antique furniture, works of art or motor vehicles. If you do not own any articles of value, then you do not have much to worry about and it should not cause you too much anxiety to allow the collector entry to your home. The collector will determine that there are few items of value and that it will not fetch much on public auction.

The collector may not disrupt your business when he makes a visit to the premises. This also means he may not seize the items you use to perform work-related duties. Trading stock, however, is not exempt from seizure by the collector.

Seizure of motor vehicles

The most commonly seized assets are normally motor vehicles. This could be any vehicle that would raise a sizeable sum at an auction and can include lorries, vans, and cars.

A vehicle is only exempt from seizure if it is a necessary tool of your trade and you should inform the collector of this. The Revenue does not always grant exemption to vehicles on this basis so be prepared to convince them you will not be able to trade without it.

How dependent are you on the vehicles in your business? What will you do if the Revenue seizes your vehicles? There are instances in which you can convince the Revenue that you may not use a different vehicle for business.

Seizure of exempt assets

This is illegal and is in direct contravention of the promise to act fairly, as stated in the Service Commitment. File a complaint against the collector as soon as it is possible. State it as urgent and send a copy to the collector. Ask the collector to postpone any further action until you have received assistance on your complaint.

Preparing for a distraint visit

There are ways in which you can prepare for such a visit. You can pay the tax or reach an agreement with the collector. It is not always possible to reach an agreement but it is worthwhile trying.

Explain to the collector if there is anyone in your household who might be upset by his visit. Ask the collector to return when this person is not at home and put that in writing. This is not an unreasonable request and the collector might agree that this is in order.

You can inform the collector that you do not own articles of value and that his visit will not bear any fruits. Offer him a list of the main items that you own. You may have to rely on your right to deny him entry to the premises if he does not accept this.

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