| Debt management |
| Insolvency |
Debt management
Indirect tax debts are pursued by Debt Management Units (DMUs).
If they remain unpaid debts pass to The Civil Recovery Unit (CRU)
in Liverpool. CRU instruct solicitors Clarke Wilmott to issue
statutory demands (SDs), 7 Day warning letters (7DWLs) and
petitions.
Direct tax debts are pursued by local Recovery Offices. If
they remain unpaid EIS will issue a statutory demand or seven day
warning letter (companies) and instruct HMRC Solicitor to issue a
petition.
When any debt exceeds £100,000 both direct and indirect
taxes are linked, the largest value of debt having conduct of the
proceedings. Insolvency proceedings are taken under the provisions
of the Insolvency Act 1986.
Petition action may result in the bankruptcy or winding up of
a debtor.
Insolvency
HMRC prefers that debtors pay their debts in full and in the one
sum. If they cannot achieve this HMRC will consider time to pay
arrangements.
But if an insolvency order is made debt recovery must cease
and insolvency procedures begin with the appointment of an IP and
proofs of debt being lodged in the insolvency (
INS9200 onwards).
Insolvency ultimately provides debt forgiveness after all
their creditors have shared in a dividend from the realisation of
the debtor’s assets.
