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Can HMRC take my house for failing to pay company debt?

22nd March, 2023
Robert Moore

Written ByRobert Moore

Marketing Manager


Rob has over a decade of experience in web and general marketing. He has extensive knowledge of the Insolvency sector and has helped many worried directors with their questions.

Rob is now working with the Board at KSA Group Ltd to develop strategic marketing programmes to support the business plan and drive more company rescues.

Robert Moore
  • What enforcement actions can be taken?
  • When could they take my House?

The simple answer to this common question is, no – so please be reassured. However, if you have been a very negligent or fraudulent director then it could be at risk

They can only take property owned by the company – no hired or rented assets, nor property under your own name.

If your company fails to pay its debts to HMRC, they will take enforcement action to get the money they are owed. Only company assets are at risk – not your everyday personal possessions.

What enforcement actions can be taken?

  • Taking control of goods
  • Court order
  • Taken through your pension or earnings
  • Debt collection agencies
  • Direct recovery of debt

When could they take my House?

Sole trader or partnership, having unlimited liability.

This means creditors like HMRC, can take personal assets of yours, if your business cannot pay what is owed. This is because there is no legal separation between your business and you.

If your house is registered in the company’s name.

HMRC can force the company into a compulsory liquidation, so that the property’s value can be realised and shared among the company’s creditors, to repay. Likewise, if the house is registered this way, it can be taken and sold, at any point, if you live in it or not.

If you have an overdrawn directors account.

This is when you, as a director, owe the company money. This occurs when a profit-making company is advised to save tax by paying directors a small salary from the profit reserves, each month. Then the company has not paid the correct tax amounts, hence HMRC are chasing them up to do so.  If the company goes into liquidation, you will be chased personally as this is money owed to the company. Therefore, to pay the money owed, your personal possessions i.e your house or car, may be taken and sold to pay back the company what you owe.

If your house was used as a personal guarantee for credit or other purposes, then being unable to pay your debts means your house would be at risk.  It is difficult for houses to be repossesed under bankruptcy laws as it depends on lots of things like your dependents etc.

If you are worried about losing your house due to company debts then we can advise on the situation so please call us.

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