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Can legal action be taken against HMRC to recover a debt?

I deal with a company which filed its tax return just before 31 December 2010.  The return showed overpaid corporation tax of approximately £900,000.  HMRC have been chased numerous times for repayment, but it is now 3 months since the amount was repayable and the repayment just isn't being processed.  Every time I speak to HMRC, they promise it's on the way and it never is.  They agree that the amount is overpaid, but apparently there is some technical issue on their computer which means the correct repayable amount is not being shown.

If this was an ordinary trading debt, the company would have threatened legal action to recover the debt.  And if the amount remained unpaid in a few more months, the company would normally instruct its solicitors to take legal action to recover the debt.

Does anyone have any views or experience on taking legal action to recover a debt from HMRC?


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By JulieY
28th Mar 2011 13:57

AAM Service?

Have you registered for the Agent Account Manager service? This is supposed to deal with HMRC issues which you are having trouble getting anyone else to deal with. You used to be able to phone a real person and they would deal with it and it worked for me a few times.

Now you have to register for the AAM service online and then send them an email with details of your gripe. I have now done this a few times and someone has called me back within a couple of days to try to sort out my problem. If you register and send them the gripe, they have an obligation to call you back in a short time. I can't promise it will work for you, but worth a try?


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28th Mar 2011 15:07

Take HMRC to court?

There is nothing to stop you taking legal action against anyone via the civil court.

You won't be able to deal with it via small claims because of the amount involved.

Send a "letter before action" (LBA) setting out the matters in dispute ......£90K owed, confirmed by HMRC, no monies paid to client etc. Then say that you feel sufficient time has elapsed for a response to be made and that if you do not receive the payment within 30 days from the date of the letter, then you will be submitting a claim for recovery of the monies to the County Court. Hopefully this will be enough to elicit a response. If not, then enterb "civil procedure rules" in your internet search engine for details of the next steps you need to take, it will cost you a few hundred pounds to enter the claim but that will be worth it to recover the amount owed.


Good luck!

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28th Mar 2011 21:16

Undue Hardship

Had a similar situation last year, not CT but CIS deducted in error by a customer of a client of mine.

Was advised to fax a letter to the relevant office/department using the phrase undue hardship and asking them to "sort it".

Refund was received within 14 days despite previously being told it would be a few months. Apparantly (not sure how true this is) once you have notified HMRC of this undue hardship they are then liable if the business fails/goes bust for not repaying the money and causing them to fail. (I think I read that on aweb a while ago so might be a rumour....) - anyway what my letter said was (by fax and post)

I am writing on behalf of my above mentioned client to formally request repayment of the CIS overpayment for the 2009-10 tax year as declared on their P35 for the year which I understand has been received and processed by yourselves.

 The repayment due of £11,032.20 is substantial and is causing undue hardship and significant cashflow problems for my client as he attempts to manage the day to day finances of the company. I should be grateful if you could treat my clients refund with an degree of expediency. May I take this opportunity on behalf of my client to thank you for your assistance in this matter. Kind regards

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By skhan
24th Nov 2011 22:46

Relevant CIS Office for Deductions Refund

Relevant CIS office/department. How do you find it?

Also what are the phone and Fax numbers?

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30th Jan 2014 20:33

If the hmrc admit they owe my business money, why do we have to claim hardship to get it.
A debt is a debt is it not?

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