Bankruptcy proceedings may be commenced if they are the only
means of forcing a debtor to pay his debts and the order may be
rescinded as soon as they are paid.
The compliance caseworker should therefore
A genuinely insolvent purchaser will often lose all interest in
their tax liabilities and do little or nothing to assist a
compliance caseworker or the trustee in bankruptcy to determine the
outstanding liabilities. How much time is spent on the case
subsequently will depend on the collection prospects.
Interest will cease to run from the date of the bankruptcy.
HM Revenue & Customs does not, in practice, claim any
penalties which would effectively be borne by innocent creditors.
The case re Hurren (a bankrupt) Trustee v CIR and Hurren,
56TC94, confirms that, even if penalties have not been awarded
before the date of a receiving order, they are liabilities to which
the bankrupt had become subject by an obligation incurred before
the date of the receiving order and are therefore provable debts.
There were no other creditors in Hurren's case, as he had
alienated his assets to avoid paying his tax debts and the trustee
in bankruptcy was using the powers under the Bankruptcy Act to
recover those assets to pay the debts.
If there is little chance of any worthwhile percentage of
even the tax being paid the compliance caseworker should
A compliance caseworker should
