INS10208 - Steps a debtor takes

Joint & several debts

Joint & Several VAT Group or Partnership Debts and Voluntary Arrangements.

Where HMRC is owed partnership PAYE or VAT propose modification to the effect that:

• The CVA/IVA shall not operate to release co-debtors
• A PVA shall not operate to release partners from their joint and several liabilities.

Where an employer or trader has joint & several partnership or VAT Group and all members go into separate VAs or there is at least one VA that has the effect of releasing all co-debtors from their responsibilities:

• Tell the Employer Section by form VAS 8 to close the existing PAYE scheme and open a new PAYE reference in the same p/ship name.
• Input form VAT 769 (pro-forma) and write off the VAT liabilities [down to the anticipated dividend level.]
• Assume responsibility for filing the VA/PVA claims, monitoring the VA performance and monitoring post VA returns and payments compliance under the new PAYE reference.
• Apportion dividends pro-rata between VAT and non-VAT debts
• Apply VAT dividends to FRAWO and remaining funds to IDMS HODs.

Where the employer or trader has joint & several partnership or VAT Group debts and IVA(s) / CVA(s) but no PVA are approved or some Group members are not in VA those not in VA remain “standing up” and may be pursued for the whole of the joint and several debt.

• Send a (This text has been withheld because of exemptions in the Freedom of Information Act 2000)to the Employer Section and/or the local VAT DMU. This tells them to pursue recovery of all current and future partnership debts as normal but to exclude the VA debtors from recovery action for pre VA debt.
• Do not input a VAT 769 pro forma
• Assume responsibility for filing the IVA claim(s) and monitoring VA performance only
• Apportion dividends pro rata between sole and partnership liabilities and apply the partner ship element immediately to the partnership records.
• Do not apply any dividend to FRAWO.
• Apply remaining dividend to IDMS HODs.