Can HMRC Take My House? What You Need To Know

Are you worried about HMRC debts? You’re not alone. Over 170,000 people visit our website each month looking for advice on debt problems.

We understand that it can be very stressful. That’s why in this article, we will share important facts about HMRC and your house. We will talk about:

•  Common HMRC debts and how they affect you
•  What to do if you can’t pay your HMRC debts
•  How HMRC can take money from your property sale to cover your debts
•  Ways to repay your HMRC debts
•  How some of your debt can be written off

Our team knows a lot about dealing with debt; some of us have been there too. With our expertise, we’ll help you understand more about HMRC debts and what you can do.

Can HMRC repossess your house?

HMRC will not repossess your home to pay off a tax debt, but they might be able to recover the debt from any property sale. This is called a charging order. 

A charging order allows HMRC to recover the debt from any proceeds raised through the sale of the property.

Sometimes creditors can force the sale of the property to get the money back quicker, but HMRC will never force you to sell your home if you only have one property. 

If you have considerable home equity, HMRC may request that you borrow against your home equity and use the money to repay the HMRC debt.

This might be achieved through remortgaging or taking out a secured loan against the property. 

You might be asked to release equity in conjunction with a Time to Pay Arrangement if your debt is significant. 

Can they take your house for company debts?

You cannot lose your home because of company debts to HMRC.

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They will only be able to repossess assets belonging to the company to clear the debt, such as office equipment or business-owned premises (not rented!). There is an exception to this if you have an overdrawn director’s account. 

HMRC can target your personal property with a charging order if you are a sole trader. This is because you and your business are not seen as separate legal entities. 

Can the debt be written off?

It’s rare to get any of your HMRC debt written off – but it’s not impossible.

You could qualify for remission on your tax credit arrears if you have severe financial difficulty and mental health issues, which relieves you from having to pay.

Some other HMRC debts could be partially or fully written off if you use an IVA or are made bankrupt, respectively. 

Bear in mind that having HMRC debts can also affect your credit rating, and ability to secure financing or loans in the future.

How can you repay HMRC debts?

The easiest way to repay an HMRC debt is to make a payment in full or agree to a payment plan called a Time to Pay Arrangement.

They will offer a payment plan based on your personal circumstances and what you can currently afford to repay without causing hardship. 

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Use the enquiry form to request a call about your circumstances and available options. You decide whether to proceed.

Continue to the enquiry form

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Some debt solutions have fees and may negatively affect your credit rating. MoneyNerd may receive a fee if you go ahead with a debt solution through The Debt Advice Service. For free, impartial guidance and help finding free debt advice, visit MoneyHelper.

If you do not agree to a Time to Pay Arrangement, HMRC can use more drastic measures to collect the debt. These other measures could add further costs to your debt.

For example, they could use enforcement action to repossess goods, or they could even take money directly from your wages. They might even try to make you bankrupt.  

HMRC Contact Details