HMRC bankrupt or do we do it ?

PaulW922

I told her to, first of all, calm down and asked her just 'how many times can HMRC petition for my bankruptcy?' I explained that HMRC (revenue) had already made me bankrupt and that she should be able to access all the details on my file. Her reply was that she represented HMRC (VAT) and that they were a COMPLETELY separate department, and had 'NO LINKS WHATSOEVER' with HMRC (Inland Revenue). I told her that I was absolutely amazed at this reply, since the Government had spent God knows how many millions of taxpayers' money in combining the two departments, so that the resultant 'sharing of information' would result in a more fair and efficient 'Tax Collection' system.

Hi Rog2 - I suppose this is too late for you but for others... I work for HMRC (not in debt collection, I am a real Customs officer), and whilst in the early days of the merger we were still two departments working under one name, this is no longer the case. I am able in my own position to check on peoples tax and VAT debts if I need to (which I rarely do). if I can do it, so can someone in the debt management section. HMRC cannot make you bankrupt twice. Nor can anyone else for that matter. A written complaint about staff conduct, separate from any other correspondence about debts etc, will usually be followed up provided it is thoughtfully written, not a rant, and sent to the right place.

The other point to bring to peoples attention is that HMRC will probably never enter into any arrangement for a Debt Management Plan. I would be astonished if there was anyone who had managed to get them to do otherwise. They are however bound by any IVA you might enter into. HMRC is a preferential creditor which means that in the event of your insolvency your taxes take priority over any other unsecured debt.

HMRC is also quite good at time-to-pay agreements if you go to them early, but waiting until legal action is being contemplated is no good. Paying your taxes under time-to-pay will not show up on any credit records. A bankruptcy obviously will.

HMRC can also send in the bailiff without a court order (because they are already the Crown). Something to be wary of..

fermi

I was under the impression that "Crown preference" (including HMRC) was abolished under Section 251 of the Enterprise Act 2002 for all bankruptcy cases where the order is/was made after 15th September 2003.

From: http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch73-84/Chapter77/part10/Part10.htm

In cases where the petition was presented on or after 15 September 2003, HMRC have no general preferential status. The Enterprise Act 2002 amends Schedule 6 to limit those creditors that will be entitled to make a preferential claim.

In cases where the winding up order or bankruptcy order was made prior to 15 September 2003, a debt to HMRC is considered to be preferential when it constitutes .......... blah blah

Although it makes no practical difference to the person who is made bankrupt who gets the priority share of anything recovered from the estate.

fermi

taib0

Depending on how many responses you get and/or how many people read down to your I&E in this thread, it might be worth posting your I&E as a separate thread specifically asking for advice and comments (and titled to indicate that). People who can give good advice on your I&E will probably be more likely to notice that way.

rog2

fermi wrote: »

I was under the impression that "Crown preference" (including HMRC) was abolished under Section 251 of the Enterprise Act 2002 for all bankruptcy cases where the order is/was made after 15th September 2003.

From: http://www.insolvency.gov.uk/freedomofinformation/technical/techmanvol1/Ch73-84/Chapter77/part10/Part10.htm
Although it makes no practical difference to the person who is made bankrupt who gets the priority share of anything recovered from the estate.

That is excellent information, fermi - it certainly DOES make me feel better, thanks.

fermi

rog2 wrote: »

That is excellent information, fermi - it certainly DOES make me feel better, thanks.

I imagine it does.:D

I'm not sure how complete the loss of 'preference is' (I bet there are some exceptions :rolleyes:), but it says somewhere on the Insolvency Service site that this little change has cost HMRC £70m per year since it came into force.

PaulW922

fermi wrote: »

I was under the impression that "Crown preference" (including HMRC) was abolished under Section 251 of the Enterprise Act 2002 for all bankruptcy cases where the order is/was made after 15th September 2003.


You could well be right - it is years since I worked in taxation

ikkleric

Hi,
This may sound like a really stupid question but I just want to double check something.
I'm currently in my 1st year of being registered as self employed so I haven't had a tax bill yet but can I put HMRC down as a creditor in my bankruptcy petition? And if so can the outstanding tax be part of my balance of debt that I'll hopefully be freed from after bankruptcy?

Thanks

Rich

oncewerewild

Hey Guys,

question about Bankruptcy and the HMRC, I currently owe the HMRC 66K, due to a scheme i was on years ago (about 8 years ago) which court cases have finally lost .

I now live in Australia, I dont have the money so my option seems to declare Bankruptcy, since I have been overseas more than 3 years I cant do it here I believe, Im not sure what i should do, Tell HMRC that im broke dont have the money here or uk, let them get debtors over here, which I believe isnt as easy as it sounds, or just try and go bankrupt in the UK..... I want to avoid going bankrupt in two countries really

roughsea

I would advise do it yourself as HMRC can take a long time to process and looking back on my bankruptcy i wish i had done it rather than wait

threeofus

Hi my husband was made bankrupt largely by the HRMC in 2015 now we are in a similar position with our home...got the letter from the trusteee but the equity want even cover his debts..surely if that's the case there isn't any point them making us sell and our children affectively homeless?