Do you have council tax arrears or owe tax to HMRC

 

HM Revenue & Customs Read more

Any individuals who fail to satisfy their debts to HM Revenue & Customs (“HMRC”), including those who are self-employed, sole traders or individuals in a partnership, can have a Statutory Demand served against them by HMRC if the debt which they owe is more than £750. If the individual fails to pay the sum stated in the Statutory Demand, HMRC can proceed to present a Bankruptcy Petition against the individual.

Once a Bankruptcy Petition is presented against an individual, even if the individual has the funds to pay the debt in full or can prove that they do not have any tax liabilities, HMRC can also request that the Bankruptcy Petition continues unless the individual also pays HMRC’s additional costs for preparing and presenting the Bankruptcy Petition.

Council Tax Read more

If individuals fail to pay their council tax liabilities, councils can apply to the Magistrates’ Court for a Liability Order. If the Liability Order is not paid in full and the debt due, (including any penalties and legal costs) is for £750 or more, councils can start bankruptcy proceedings.

Once a Bankruptcy Petition is presented against an individual, even if the individual has the funds to pay the debt in full, councils can request that a Bankruptcy Order is made unless the individual also pays the council’s costs for preparing and presenting the Bankruptcy Petition.

What happens when HMRC or a council presents a Bankruptcy Petition and a Bankruptcy Order is made? Read more

If the Court has made a Bankruptcy Order against an individual following a Bankruptcy Petition presented by HMRC or a council for tax or council tax arrears, the Court will contact the Official Receiver to review the Bankrupt’s affairs.
    
A Trustee in Bankruptcy may be appointed to investigate in detail a Bankrupt’s affairs their affairs in the period leading up to the making of the Bankruptcy Order. If a Bankrupt has disposed of any of their assets, such as the matrimonial home, or made payments to specific creditors (which are known as an antecedent transactions), the Trustee in Bankruptcy may issue claims against the parties to the transaction to recover the asset for the benefit of the creditors.

The Trustee in Bankruptcy will also arrange to sell a Bankrupt’s assets, including the Bankrupt’s home and distribute the proceeds to the creditors of the Bankruptcy Estate.

 

How can we help?

We can assist individuals who have had Bankruptcy Petitions presented against them by HMRC and local councils.

If you believe that you do not owe the tax claimed by HMRC or council tax claimed by a local authority, we can assist by preparing evidence demonstrating why the debt is substantially disputed. In addition, we can also enter in to negotiations with creditors to achieve a settlement outside of the Court to avoid a Bankruptcy Order been made.

Should you require any assistance please contact us.