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HMRC internal manual

Debt Management and Banking Manual

HM Revenue & Customs
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Enforcement action: country court proceedings: the defendant’s response to the claim: defence filed

No matter how little substance or merit there is in a defence, you must always answer it in writing. The reply should only address the debt in court. You should send a copy of your response to the court. In cases where the reply is to someone acting on behalf of the defendant, typically a solicitor, you should also send a copy of the reply to the defendant.

Defence filed

Section 25(1A) of the Commissioners for Revenue and Customs Act 2005, introduced by Section 137 Finance Act 2008, allows an officer of HMRC to bring all claims in the County Court in the name of the Commissioners for HM Revenue and Customs for tax, NICs and other debts covered by the Taxes Acts. In such cases, on receipt of a defence, the court will supply you with a copy of the defence and set down the case for a hearing.

You should always attend the hearing and answer the defence by reference to your certificate of debt, your written response and any other evidence.

If you have prepared thoroughly you should have little difficulty in obtaining judgment.

Some debts such as Contract Settlements and Inheritance Tax are not covered by the Taxes Acts and whilst still claimed on behalf of the ‘Commissioners for H M Revenue and Customs’, if the court receives a defence against this type of debt the case will be allocated to the case management track. You do however still retain the option of applying for summary judgment (see DMBM665960).

R97 overpayment cases

If a defence is filed, consult your line manager for advice.

Cases for amounts of £50,000 and more

Where a defence is received and the amount involved is £50,000 or more, the court will either:

  • set the matter down for a hearing review
  • give notice that the case is to be transferred to the High Court.

In cases where a transfer to the High Court is proposed, make an immediate application on form N244 for the case to be heard locally along the following lines:

  • there is no counterclaim admissible against Crown debt and under TMA the financial substance is irrelevant
  • the case is not otherwise important and raises no question of importance to others who are not parties, or questions of general public interest
  • the complexity of the facts, legal issues, remedies or procedures involved do not warrant a High Court hearing
  • transfer to the High Court would not result in a more speedy trial of the action.

End the application with the words ‘This application is made under the provisions of Section 7(4) of The High Court and County Court Jurisdiction Order 1991 (as amended 1993, 1994, 1995, 1996).’

You must:

  • attend any subsequent hearing
  • ask for the matter to be set down for pre-trial review (at which you would seek judgment).

Cases of difficulty

If the court insist that the matter is appropriate for hearing in the High Court or further problems arise consult your line manager.

Date of hearing

Under the Civil Procedure Rules the court must give you at least eight days notice of the day fixed for the hearing of the action. If courts are busy the hearing may not be for several weeks. You need to consider what can be done during this period to avoid the delay being exploited by the defendant as a reason for not paying.

Transfer to the defendant’s home court

The case will be transferred automatically to the defendant’s home court when a defence is filed (except where the defendant states in the defence that the amount claimed has been paid, when transfer will be effected only after the claimant confirms in writing that the proceedings are to continue). But where the defendant is a limited company, the case will be transferred to the claimant’s home court.

For further details see DMBM665950.