Debt and return pursuit: foreign cases: Mutual Assistance in the Recovery of Debt (MARD) (Social Security Debts): recovery requests received from other member states: disputes: establishing the dispute
Other member state’s debt disputed
We are required under EU law to suspend our recovery action when either the member state or the debtor informs us that the debt we have been asked to recover is under dispute.
However, if a debtor tells us about a dispute before we have received notification from the other member state, we must first be satisfied that the dispute:
- has been properly made (in other words, it has been disputed in writing to the tax authorities in the other country, according to the instructions of that country if known)
- is not artificial (for instance, the debtor simply doesn’t want to pay the debt)
- has not already been rejected by the applicant member state
before we suspend our recovery action.
Questions to ask
To help you decide this, obtain information by asking the debtor the questions below.
- On what grounds are you disputing the debt?
- What period does the dispute relate to?
- How have you disputed the debt?
- Who did you dispute the debt with and when (for example, what was the name and address of the office and the date it was sent)?
- Has your dispute been acknowledged by the authorities in the other member state?
Ask for a copy of their dispute letter and the other member state’s acknowledgment.
Remember that in sifting the dispute in this way, you are not looking at whether it has any merit; this is for the other member state to decide. You are only looking to establish that they have followed the correct process for raising a dispute and that it has not already been rejected by the applicant member state.
If the debtor tells you that they dispute the debt, but hasn’t done this in writing, explain that:
- unless they formally dispute the debt, we have no authority to suspend our action and so therefore we have to continue with it
- information about how to formally dispute the debt will be on the debt notification.
UK interest or enforcement measures used disputed
If the debtor is disputing their liability to UK interest charged on the applicant member state’s debt, or the enforcement measures the UK are using to recover the debt, they must raise that dispute with HMRC.