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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Pre-enforcement: consider the defaulter: deceased customers: outstanding returns

The personal representative should complete:

  • any outstanding returns
  • form R27 or 920 if appropriate
  • any forms issued to them by Grimsby VRU (for example the VAT 7 to cancel the registration).

In any case where there is a successor business has and in a VAT case they have retained the VAT registration number, the outstanding returns are their responsibility and not that of the personal representative acting for the deceased estate.

Returns not received

VAT and other indirect taxes

If returns are not received, automatic assessments will continue to be issued. These are legally enforceable debts in the absence of returns. If the assessments are paid there are no returns or debt to collect.

Grimsby VRU will, as appropriate:

  • change the registered details on the VAT mainframe via DTR to ‘THE PERSONAL REPRESENTATIVE OF THE LATE…’
  • send final returns to the date of de-registration, with the VAT 7 to cancel the registration or VAT 68 to reallocate the registration, with an appropriate covering letter to the personal representative.

If Grimsby reallocates the VAT registration they should advise the Estates & Trusts Office who will reverse the deceased signal to remove the VAT debt from their allocation.

Direct taxes

Consider further action if:

  • there is likely to be a debt
  • there is an indication that the estate has assets
  • Customer Ops has not accepted a completed form R27 in lieu of a SA return.

Potentially £1,000 or less outstanding

For all sole liabilities including those where the deceased was a sole trader, unless there is evidence in a PAYE/VAT case that the business is continuing:

  • do not pursue the return
  • complete a pro-forma return as nil or in the amount of the payment on record
  • make the record dormant/cease the employer record
  • put your reason for closure on SA notes
  • (This content has been withheld because of exemptions in the Freedom of Information Act 2000)  DMBM735030(This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

Potentially more than £1,000 outstanding

You may need to contact former employees (in order to reconstruct form P35) or the former agent. Former agents have no obligation or any legal authority to help you unless they have been appointed by the personal representatives.

For SA, consider raising a determination against the personal representatives of the estate (for further information, see SAM90010).