If the taxpayer claims financial hardship as a reason for not
settling a debt, you, the Debt Management & Banking caseworker,
will need to issue a DMB 5(Part 2) for them to complete in support
of the claim.
You should bear in mind that the taxpayer can settle the debt
by conversion or sale of a capital asset, through a loan or
mortgage secured against a capital asset, in cash or out of income.
Taxpayers who claim to have insufficient money should be actively
encouraged to seek funding to discharge the debt from a bank or
other financial institution.
Therefore, you will need as much information as possible
about the taxpayer’s financial circumstances before you can
give consideration to a claim of financial hardship.
The DMB 5 (Part 2) asks for details of the taxpayer’s
income, expenditure, capital assets, savings and any other debts
owed. It also asks for confirmation of the benefits received by the
taxpayer from the estate and you should ensure that the details
given here can be reconciled with the information you have entered
on the DMB 5.
Finally, the DMB 5 (Part 2) should be sent to each taxpayer
in the estate claiming difficulty in settling the debt, but you
should also bear in mind that all the taxpayers are jointly and
severally liable for the tax and that if one is claiming hardship,
you must look to their fellow taxpayers to settle the entire debt
in the first instance.
You should only need to consider completion of the DMB 5
(Part 2) if the assets of the estate (or their proceeds) are
irrecoverable and the taxpayer is liable to discharge the debt from
their personal resources.
