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