Account Freezing Orders after the Taxbuddi Case

A practical Guidance Note for businesses and individuals

Account Freezing Orders (AFOs) are a powerful tool under Part 5 of the Proceeds of Crime Act 2002 (POCA). They can be obtained quickly - often without notice - to prevent money in a bank account being moved while an enforcement agency investigates whether that money is “recoverable property” or intended for unlawful conduct.

Because they can be made without prior warning, the core issue for many account holders is not only whether the order should have been granted, but how quickly they can get back before a court to correct scope, fix practical problems (payroll and operating costs), or set the order aside entirely.

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Setting the scene: The Taxbuddi case

The case commonly referred to as Taxbuddi is R (Mileage Reclaim Limited (trading as Taxbuddi)) v North Somerset Magistrates’ Court and HM Revenue & Customs. The underlying event was an AFO made by the magistrates’ court on 22 February 2024, granted without notice, freezing two business bank accounts. The AFO was sought on the statutory basis that there were reasonable grounds to suspect the funds were “recoverable property” (i.e., proceeds of unlawful conduct), as POCA permits.

The company applied promptly in the magistrates’ court to set aside the AFO, relying on POCA’s express mechanism for variation and discharge. However, the difficulty it faced was listing. The set-aside application was not heard quickly, and the case materials record that the challenge hearing was listed for late June 2024 - with the interim business impact continuing in the meantime.

Because of that delay, the company sought to bring the matter to the Administrative Court by way of an urgent judicial review. The High Court refused permission for judicial review largely on the footing that there was an alternative statutory remedy available (the set-aside route in the magistrates’ court), even while noting the seriousness of the situation for the business and referring to failings in how the original without-notice application had been handled.

The practical takeaway is simple - Taxbuddi is frequently discussed because it illustrates the gap that can open up between “there is a right to apply to set aside or vary” and “you get a prompt hearing that makes the right meaningful in practice” - particularly where the order affects a trading business.

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What an AFO means in practice

An AFO is protective, not determinative. It does not decide guilt, and it is not (in law) meant to operate as punishment. But for a business that runs its payroll and supplier payments through the frozen account, the real-world effect can be severe.

The point for clients is to treat an AFO as both:

• A legal measure that must be challenged on proper grounds; and
• A business continuity event that needs immediate practical steps.

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The key legal levers: Vary or set aside

POCA gives the court power to vary or set aside an AFO at any time on the application of an enforcement officer or “any person affected by it”.

In plain terms, there are two common routes (often run together):

‍Variation

This is about keeping the business functioning while the dispute is resolved: permission for particular payments, defined expenditure caps, or exclusions.

Set aside (discharge)

This is the merits challenge. Whether the AFO should have been made at all (or should be significantly narrowed) because, for example, the statutory test was not met, the scope was disproportionate or the without-notice duty was not satisfied.

A practical point: many businesses need a variation application immediately, even if they intend to pursue a full set-aside, because the commercial harm accrues daily.

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Immediate priorities

The steps below are intentionally short and operational - because speed matters.

• Get the full pack: The sealed order and the supporting application/witness statement(s).
• Confirm the freeze footprint with the bank/payment provider: What is blocked, whether incoming funds can still land and whether any linked accounts are affected.
• Preserve the evidence trail: Accounting records, invoices, contracts, onboarding files and communications that explain the transactions now being questioned.
• Build a “cash critical” schedule: Payroll dates, rent, tax dates, critical supplier deadlines - so any variation request is tightly evidenced.
• Start work on a controlled communications plan: Staff and key suppliers may need reassurance, but avoid speculation or emotive statements while the legal position is being formulated.

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The “return date” question

A fair procedural question is why AFOs do not always operate like many other ex parte or urgent prohibitory orders, where courts often build in an early “return hearing” so the respondent gets an automatic opportunity to answer quickly.

With AFOs, the statutory model places emphasis on the respondent’s ability to apply to vary or set aside, rather than building in an automatic return date in every instance. What that means in practice is that listing becomes decisive. If a hearing date is not secured promptly, the right to challenge can feel hollow in commercial terms.

For clients, the practical response is to treat urgency as something you must prove and structure, not something the court will assume:

• Make the initial application targeted (what must be paid, why, when);
• Exhibit the documents that demonstrate necessity and proportionality; and
• Ask for a short hearing as soon as reasonably possible.

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What you can ask the court for

Most applications focus on a small number of essentials, supported by clear evidence. Common examples include:

• Permission for payroll and core operating costs;
• Time-limited permission for tax liabilities falling due; and
• Provision for reasonable legal expenses so the challenge can be pursued properly (where appropriate on the facts and the order’s terms).

(Each category needs careful handling and proper substantiation—courts respond best to specificity and credible records.)

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Practical Implications

An AFO is one of those measures where legal correctness and practical reality can diverge. The most effective response usually has two strands running in parallel: (1) an urgent, evidence-led request that stops the business from being paralysed, and (2) a disciplined merits challenge aimed at narrowing or discharging the order. Taxbuddi is often referenced because it shows how delay alone can magnify impact, even before the underlying issues are fully tested.