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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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Enforcement action: county court proceedings: preparation and service of the claim: changes in defendant’s circumstances

Insolvency

Where you learn after starting proceedings that the defendant is insolvent, write to the court notifying them that:

  • the defendant is insolvent
  • you do not intend taking further proceedings.

For CCBC cases, use RECORD ACTIONS to move the work item to C/W CCP to inhibit judgment in default. The work item will have a next action of ‘Review’ and ‘today’ as the B/F date.

You should write off the court fees.

The court will automatically strike out your action after four months if the claim has not been served, or after 12 months if the claim has been served.

Notification of Voluntary Arrangement (VA)

An individual, a partnership or a company can seek a voluntary arrangement. Until an arrangement has been drawn up and put to creditors, recovery action may continue. If HMRC learns that a VA is being drawn up, you should informally suspend proceedings temporarily.

However, if the debtor wants protection from any action by creditors:

  • an individual may seek an interim order from the court
  • a small company can obtain a moratorium by filing documents in the court
  • a large company may go into administration.

Action in Debt Technical Office (DTO)

If you are told that one of the above steps has been taken, suspend proceedings(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Notification of Administration Order hearing

If you receive notification of Administration Order hearing, suspend action and await the outcome of the hearing.

For CCBC cases, use RECORD ACTIONS to move the work item to C/W CCP to inhibit judgment in default. The work item will have a next action of ‘Review’ and ‘today’ as the BF date.

Administration Order made

If the court makes an administration order take no further court proceedings and treat any unscheduled costs as irrecoverable.

Administration Order not made

If the court does not make an administration order, resume your court action immediately.

Notification of defendant’s death

Individual cases

Where you learn after starting proceedings that the sole defendant has died, you should:

  • notify the court
  • withdraw the case
  • write off the fees
  • transfer the case to the Estates & Trusts Office in Nottingham

and for CCBC cases, move the work item to C/W CCP using RECORD ACTIONS. This will inhibit judgment in default. The work item will have a next action of ‘REVIEW’ and ‘today’ as the BF date.

Multiple defendant cases

When you learn that a defendant has died and there is at least one other living defendant included in the action:

  • notify the court that one of the defendants has died
  • continue the action against the remaining defendant(s).

Judgment entered

Where judgment has been entered, follow the guidance at DMBM666460.