Charge (Fixed)

HMRC's Debt Management and Banking Manual, in explaining how enforcement officers should treat property covered by a debenture, sets out the defining feature of a fixed charge: 'The fixed charge usually attaches to specific assets that a company cannot dispose of without the consent of the debenture holder even in the normal course of business.' The manual notes that fixed charges 'tend to be the larger and more durable items including property and book debts and are often listed in a schedule,' though a fixed charge 'may also extend to 'all plant, machinery and vehicles'.'

Because the chargor's freedom to deal with a fixed-charge asset is curtailed from the outset, a practical consequence follows for enforcement: 'You can seize goods covered by a floating charge, but not goods covered by the fixed charge.' The debenture document itself identifies which assets fall under the fixed charge and which fall under the floating charge, so HMRC guidance advises officers that 'you may need to ask for a copy of the debenture' to establish which category applies. In an insolvency, a fixed charge gives the chargee priority over the specific asset it covers, ranking ahead of a floating charge over the same class of assets.