Statutory demands from HMRC can be frightening experiences. Our team of experts have dealt with 100's claims for clients being chased by HMRC. We can help have the statutory demand removed.

Where a creditor has a claim against you, whether you are a company or an individual, it is not unusual for a statutory demand to be served on you. HMRC often present statutory demands against individuals.

This is a relatively inexpensive out of court process where the claim can be notified and, if the debtor does not pay within an 18 day period, they can use this to support the presentation of a winding-up petition (for companies) or a bankruptcy petition (for individuals).

When would HMRC Present a Statutory Demand?

HMRC may seek to present a statutory demand where the sums demanded are a combination of different taxes or otherwise where the tax liability is unclear and HMRC wish to rely on the schedule attached to the statutory demand in winding-up or bankruptcy proceedings.

The presentation of a statutory demand also serves to quickly bring the taxpayer to the table and stimulate tax negotiations.

How should a company or individual respond?

You should respond quickly and commence negotiations if you have not done so already.

After 21 days, HMRC will be able to petition to court for the company to be wound-up or you declared bankrupt and, even if a settlement is subsequently reached, this will add legal costs to the bill.

A statutory demand is really the last opportunity you have to seek to negotiate any exit from enforcement by HMRC. If you allow matters to escalate then the court will intervene and in a court hearing you may not receive the same reasonable level of treatment that you would otherwise be able to gain from HMRC.

Setting aside a statutory demand

For individuals, following receipt of a statutory demand an application can be made (or threatened to be made) to court for the statutory demand to be set aside, in which case you can claim your legal costs from HMRC.

The grounds to set aside a statutory demand are slightly wider than those for defending a bankruptcy petition, as the sums demanded must be accurate whereas a bankruptcy petition merely needs to meet a debt threshold of £5,000 (as of writing).

At Francis Wilks & Jones we are able to assist with such negotiations or litigation steps, should they be required, and advice on any matters to protect you personally in the event you or your company face a statutory demand or the risk of bankruptcy or winding-up proceedings.

Please call any member of our brilliant statutory demand team for assistance. Alternatively email us with your query and we will call you back at a time convenient for you.

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