HMRC & County Court

[thecatsdad]

Hi all

Been away from this site for a long time but recently had to come back due to letters from a DCA: However, I have a question unrelated to DCA's which I need an answer to.

 

Long story short; I was self-employed for a long time in the late 80's, early 90's, paid my VAT, Income tax and NI subs no problem in the early years, but in the later years things got away from me and I stopped paying the tax & NI.

I then went PAYE and ignored the brown envelopes (this is a very stupid course of financial management and as this tale will justify later, do not do this) for a number of years until the HMRC turned up on my doorstep and hit me with a County Court summons.

 

Duly went to Court - HMRC would not budge on the amount, even though I had excellent accountancy advice and engaged a (not excellent) solicitor and a barrister - and admitted the liability I was still thumped with the full £30 grand bill.

 

OK, so I took it on the chin, got my CCJ, entered into a repayment plan with the feds and got on with paying it off; however, on the court order there was a definite amount which was awarded against me - £30,328.50 -to be paid at £900 a month. I have never missed a payment and I have paid roughly half - or so I thought.

 

Recently, I was wondering why I had never received any statements from the feds, so I called them up and they said statements were going to the accountant, but that they could cancel this and send them to me, obviously I said please do.

 

In the course of the call, the feds stated that I had almost finished the debt - I was thunderstruck, because I thought I still owed about £15k - so I asked how come?

 

They said, that there were two amounts outstanding an 'In Court' & 'Out of Court'.

The 'In Court' stood at £170 but the 'Out of Court' was £18k; I asked how this amount differed to what I thought I owed and they said interest was being added. This amounts to over £3,700 above what the Court Order states I have to pay.

 

What is this 'In Court' and 'Out of Court' malarkey? This is news to me.

 

I dug out the Court Order and it's pretty clear that no order has been given for interest - but doesn't say that interest shouldn't be added either, to be fair - and during the actual case hearing which I attended, I distinctly do not recall any request from the feds that interest be added to the debt.

 

There is a caveat on the form about interest addition, but it does state, '...., the claimant may be entitled to further interest' (my italics), but wouldn't this suggest that the claimant would have to ask the Court for this facility? If so, the feds didn't, certainly not in my presence.

 

I've written to the Court asking for clarification, but I thought I'd ask on here if anyone has any knowledge or experience of this?

 

Many thanks

[Trilby274]

I believe HMRC automatically add interest whether there is a court order or not. The out of court amount is the interest charged on the reducing balance and, I think, there is not much you can do about it. It's a pity that your Barrister couldn't think sufficiently to get interest barred if you made all your payments on time (which you obviously have). It may be worth asking for a full statement of account dating from the CCJ and order.

[thecatsdad]

I believe HMRC automatically add interest whether there is a court order or not. The out of court amount is the interest charged on the reducing balance and, I think, there is not much you can do about it. It's a pity that your Barrister couldn't think sufficiently to get interest barred if you made all your payments on time (which you obviously have). It may be worth asking for a full statement of account dating from the CCJ and order.

 

Hi Hat (Sorry, drummers joke) Trilby

 

Yes, of course you're right about the interest charges - not forgetting the penalties for late payment/filing - the original amount the HMRC went after me for was £11k, but then they add the above and the amount ended up at over £36k!!

 

But, my issue is that I have a Court Order for a very specific amount and no mention in Court or on the Order of further interest being added.

I also query how the HMRC can quote 'In' and 'Out' of Court figures. My 'business' is in what the Court state, not the HMRC.

 

I have a full statement from the time of the CCJ and it says I owe £170.00!

Maybe I should just pay that and let them come after me for the rest and argue in a new Court case.

 

By the way, the Barrister cost me £250 for two hours and he was late to Court and by the time he got there I'd tied the deal with the HMRC and on telling him this he said 'OK, I gotta go, see ya'. Useless.

[Trilby274]

I think you are right just to pay the balance of the CCJ and await developments. You have carried out the court's wishes, so that is that.

 

Barristers are like bankers - some very good, but others bloody awful. I paid £500 for a London barrister (junior) for a day and he went through the opposition like a dose of salts - he'd only read my case file on the way down on the train! He was brilliant.