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HMRC internal manual

Debt Management and Banking Manual

Enforcement action: country court proceedings: the defendant’s response to the claim: summary judgment

Prior to the 2008 Finance Act some debts such as Value Added Tax, Contract Settlements, Inheritance Tax, Stamp Duty Land Tax and so on were not covered by the Taxes Acts and had to be claimed on behalf of the ‘Commissioners for Her Majesty’s Revenue and Customs’.

The new Section 25 (1A) of the Commissioners for Revenue and Customs Act 2005 allows an officer of HMRC to bring all claims in the County Court in the name of the Commissioners for H M Revenue and Customs. However debts such as Tax Credit overpayments, Contract Settlements, Inheritance Tax and so on are still not covered by Practice Direction 7D to the Civil Procedure Rules (CPRPD7D), see DMBM665800.

If the court receives a defence against a debt not covered by the practice direction, the action will be allocated to the case management track.

You do however still retain the option of applying for summary judgment (see DMBM665760 and DMBM665800), however you should not do so for tax credit overpayment cases unless the court specifically order you to do so (see DMBM665855).

You can also apply for summary judgment

  • where the claim defended is within the provisions of the Taxes Acts (that is for income tax, or a duty collected as if it were income tax) and
  • the court refuses to implement the practice direction (DMBM665800) and allocates the case to the case management system.

But you should only apply for summary judgment in cases where you have a very strong case, such as Contract Settlements where there is a contract for payment, otherwise the case may be struck out and summary judgment entered against you.

Applications for summary judgment are made under Part 24 of the CPR, and should be made on form N244. A fee is payable which you can claim in the application for summary judgment.

It is important that your application for summary judgment is made before the date shown on form N152 (Notice that a Defence/Counterclaim has been filed), or as soon as possible after the defendant files an Acknowledgment of Service.

When filing your application with the court you should confirm that the court will serve each defendant with a copy of the application and the evidence. If that is not your court’s practice you should arrange to serve the documents at least 7 days before the hearing date and then complete and file a Certificate of Service on form N215.

The court will not normally allocate the claim to a track before hearing the application. If the application (for summary judgment) fails the court will treat the case as an allocation hearing, allocate it to the appropriate track and give case management directions.

Summary Judgment Hearing

Claims which do not fall within the provisions of the Taxes Acts

At the summary judgment application hearing, it will be up to you to start by making representations on behalf of HMRC. However you must take your lead from the judge. In making your representations, you should

  • say that you are applying for summary judgment under Part 24 of the Civil Procedure Rules
  • provide a brief resume of the events giving rise to your claim (for example if the claim is for a Contract Settlement, the officer who conducted the investigation should be consulted before the hearing so that a summary could be prepared giving the reasons for the commencement of the investigation), what was revealed, whether the defendant was represented and any further information which answers the defence or assists the claim)
  • provide evidence of a contract for payment, including the offer and acceptance in settlement cases (a copy of the contract and the letter of acceptance and certificate of debt should have been attached to the N1 claim form - see DMBM565130)
  • show that the defendant has failed to honour the contract and that there is therefore no defence
  • ask for judgment for the amount of your claim, interest and the court fees and costs (including the fee for the summary judgment application).

Cases where the court does not implement the practice direction

When making your representations in these circumstances, say that you are applying for summary judgment under Part 24 of the CPR and refer to the certificates of debt, the provisions of the Taxes Acts and any other evidence that you have mentioned in your application.

Inform the court (with respect) that

  • the defendant has no real prospect of successfully defending the claim
  • it would not be a fair and expeditious disposal of the case to set it down for a trial incurring the claimant further substantial costs, ultimately to be borne by the defendant in the event of judgment being obtained, and
  • there is no other reason why the case should be disposed of at a trial.