Debt Collection

My thanks to a loyal reader who pointed me to Accounting Web, which published a query submitted by a tax agent on behalf of a client who had received a visit from a "very aggressive" HMRC debt collector.

One of the responses to the query gives step by step advice on what to do if faced with this situation, and I have published it unedited as it may be helpful to others:

Query:

"In May of this year a client submitted their P35 to HMRC, but missed off the box 28 figure, CIS deductions suffered. They then realised their mistake and asked us what to do. We sent in an amended P35 and covering letter for them, explaining what had happened and showing the CIS deductions correctly (this was in July).

A few weeks ago, they received a demand from HMRC for the amounts owing. They rang HMRC and explained the situation and we also rang them and was told "we are 3-4 months behind with the post".

On Friday, they received a visit from a very aggressive debt collector demanding assets or a cheque for the amount thye think is owed. It was explained to them that an amended P35 had been submitted and we were awaiting processing of this.

She claimed that to be "nonsense" and that she "wanted their money now". In the end she has given 7 days "grace" to get the revised return processed. We faxed a copy to the employers unit on Friday afternoon and have called them this morning. They cannot promise that it will be processed in time at all.

Where does this leave us? We have the PAYE team way behind with their work and the debt collectors threatening to seize assets if their own people don't process by the end of this week!

Is there anything we can do to either call off the debt collection or push through the amended P35 more quickly?"

One of the responses from an AA reader:

"1) File an immediate formal complaint. Make the complaint by telephone and confirm in writing.

2) Contact the relevant Debt Management Office and file a complaint regarding the disgraceful and utterly unacceptable attitude displayed by the officer who called.

3) Instruct your client NOT to open the door to these clowns - without a court order they have no powers to force entry or to seize goods, and if they refuse to leave when told to they are open to arrest.

4) Point out that by demanding monies which they know, or ought to know, are not due they are committing offences under s40 of The Administration of Justice Act 1970, and, under s2 of the Protection from Harassment Act 1997.

5) For a small fee your local County Court given proof that these monies are not owed, and that HMRC are acting without even opening their post and processing mail before acting, will grant an ex parte emergency injunction against HMRC forbidding them from continuing with collection until the returns etc have been properly processed.

6) Once HMRC confirm that no tax is actually owed, file proceedings on behalf of the client for damages and compensation for distress caused, and for your own costs in the case, keeping the total claim to less than £5,000 as this keeps it in the small claims court (fast track)."

Tax does have to be taxing.

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