Some advice needed

[BoredBloke]

A bit of a long story here so apologies in advance

My ltd company was not billing anything while I was working overseas. As a result all my VAT returns were zero returns. It seems that one of the returns went missing. I know I posted it so it either never got through or lost at the other end. A while ago I got a bill from HMRC for £42. I figured this was a mistake and ignored it (a mistake, but easy to do when you are spending a long time overseas - espcially as I knew the company wasn't billing). Then I got a letter from a debt collection agency, literally no time after the first letter from HMRC. I contacted HMRC to see what was going on. This is when I found I had a missing return and they estimated my return as being X based on previous VAT quarters. It seems that I was actually almost £800 in credit with HMRC having somehow overpaid my VAT and their estimate was £42 more than the amount I'd overpaid. Hence the demand for the £42. So I got a replacement VAT return sent, filled it in and they sent me a document showing that I no longer owed £42 and that I was infact due almost £800 from them. A few weeks later I got a call from the debt company. I explained what had happened and got back onto HMRC to find out why I was still being asked for money they agreed I didn't owe. They said they would get somebody to call off the dogs and to forget about it. On Saturday of last week I got another call from them. Again I explained the situation and told them to contact HMRC for verification that I no longer owed any money. On the 10th (before the Staurday call) they sent a letter, which presumably arrived after the weekend (i work down south all week so only got it toight) stating that they are now going to start court action to recover the £42 that the HMRC know I do not owe and which they have been told on numerous occasions that I do not and never did owe.

I'm going to call them tomorrow. Can anybody suggest what I should say. My feeling is that I'm 100% the innocent party in this. I do not see why I should do anything at all in this matter since the body who instructed the debt collection agency agree that they infact owe me money rather than it being the other way around. Also, I have told this company on a couple of occasions to contact HMRC as this debt is their mistake. My only issue is that working in financial services I don't really fancy having this go to court, but as I said, I don't see why I should actually do anything here. I'm tempted to see if I can sue them for harrasment since the £42 they are chasing was never owed in the first place.

Any suggestions?

[TykeMerc]

If you've got the documentation to prove you don't owe the £42 then I suggest you write to them, send it Special Delivery (it's worth the £5) stating the facts and that if they contact you in future that you will be entirely happy to discuss the matter in the County Court and counter sue for the costs and time spent as you can prove that there's no debt.

I'd be tempted to write to HMRC too and ask them in to confirm in writing that they've called off the debt recovery agent.

In your situation I would keep all contacts in writing as if for some weird reason they do take it to court you can kick them to death with the evidence.

[BoredBloke]

If you've got the documentation to prove you don't owe the £42 then I suggest you write to them, send it Special Delivery (it's worth the £5) stating the facts and that if they contact you in future that you will be entirely happy to discuss the matter in the County Court and counter sue for the costs and time spent as you can prove that there's no debt.

I'd be tempted to write to HMRC too and ask them in to confirm in writing that they've called off the debt recovery agent.

In your situation I would keep all contacts in writing as if for some weird reason they do take it to court you can kick them to death with the evidence.

But from my perspective, why should I spend anything. This is the HMRC that cocked up and a debt collection agency who will not contact the body who passed the debt to them in the fist place. There was no debt, the HMRC owed me almost £800! Why should I spend even small sums of money to prove I don't owe anything.

[AtW]

My feeling is that I'm 100% the innocent party in this.

No you are not 100% innocent Tony - if you run a company then you accept responsibility for all sort of things such as timely reporting of VAT figures.

The fact that you don't owe any money is irrelevant - you did not submit returns on time which has caused HMRC make some action that certainly cost taxpayers some money, they had to look carefully at your company, do estimates etc etc etc.

You should be grateful you did not get fined massively for failing to submit VAT return on time.

Frankly you should be grateful that VATman did not kick your door down in a daring dawn raid with MP5 aimed at your face

[TykeMerc]

But from my perspective, why should I spend anything. This is the HMRC that cocked up and a debt collection agency who will not contact the body who passed the debt to them in the fist place. There was no debt, the HMRC owed me almost £800! Why should I spend even small sums of money to prove I don't owe anything.

The benefit of a Special Delivery letter is it can't be denied that you sent one that they received. Paper trail evidence speaks volumes.

Obviously it's entirely your call, the other approach is to call them and say "I look forwards to seeing the summons, I will be happy to defend the case in court and counter sue for costs and lost income".

It's entirely likely that the debt recovery company is just trying it on, but if they're serious then you will win in court if you have documented evidence that there is no debt.

[BoredBloke]

No you are not 100% innocent Tony - if you run a company then you accept responsibility for all sort of things such as timely reporting of VAT figures.

The fact that you don't owe any money is irrelevant - you did not submit returns on time which has caused HMRC make some action that certainly cost taxpayers some money, they had to look carefully at your company, do estimates etc etc etc.

You should be grateful you did not get fined massively for failing to submit VAT return on time.

Frankly you should be grateful that VATman did not kick your door down in a daring dawn raid with MP5 aimed at your face

I did sumbit the return - they just have no record of getting it - why would I not have submitted it? It was a zero return! Get the vat form, fill in zeros and send it in with zero to pay. I sent it! They were the easiest of VAT forms to do because I wasn't billing! I had no indication from HMRC that anything was wrong until the demand from them came through, quickly followed by this debt collection company. It's not like they send you confirmation that they got the return.

[Clippy]

But from my perspective, why should I spend anything. This is the HMRC that cocked up and a debt collection agency who will not contact the body who passed the debt to them in the fist place. There was no debt, the HMRC owed me almost £800! Why should I spend even small sums of money to prove I don't owe anything.

I hear where you are coming from as I had a similar situation regarding council tax for one of my BTL's a few years ago.

The property was briefly empty which meant I was liable for the council tax for that period.

I duly paid but a few weeks later got a letter from the council saying I hadn't.

I phoned up, explained the situation and was asked to submit proof that I had paid which I did.

A few weeks later, I got another threatening letter saying I still hadn't paid and was now being taken to court.

This got my back up no end and I thought great, I'll see you in court where you'll be made to look like the fools you are.

Anyway, after I calmed down, I contacted the council again, but this time spoke to a manager whose details I had retained the last time I had a council tax query.

She was reluctant to help but when I explained the situation to her, she asked me to put it in writing and she would investigate.

Anyway, a week or so later I duly got a letter confirming they had tracked down my payment - it had been assigned to another property - and that my account had been updated and any proceedings stopped - no apology, btw.

Moral - although I was completely in the right, the council had the law on their side. Coupled with the fact you are dealing with jobsworths who don't think twice about wasting tax payers money on un-necessary legal action, it made sense for me to go out of my way to resolve this to prevent further action.

My suggestion is to speak to the VAT office concerned - preferably a manager who will either investigate themselves or assign one of their minions to do it - and get this sorted.

[Zippy]

I agree with what tykemerc said. Tell 'em all in writing that you don't owe any money and refuse to deal with them on the phone. Send the letters - worth a fiver or two to clear it up surely?
AtW is right in that you should have dealt with it earlier, but that doesn't excuse the way HMRC's agents (the debt collection co) are behaving now.
The debt collection agencies make a lot of money chasing debts that are sold on to them cheaply/ones they can make a profit out of, so are not motivated to help 'sort it out'. There are people on here who have been chased for money they don't owe.
OR if the agency only want £42 just pay 'em and get your rebate from HMRC in the usual way.
OR tell them (in writing) that you will see them in court

Cheapest option?

Good luck anyway (and don't stress about it!)

[BoredBloke]

I hear where you are coming from as I had a similar situation regarding council tax for one of my BTL's a few years ago.

The property was briefly empty which meant I was liable for the council tax for that period.

I duly paid but a few weeks later got a letter from the council saying I hadn't.

I phoned up, explained the situation and was asked to submit proof that I had paid which I did.

A few weeks later, I got another threatening letter saying I still hadn't paid and was now being taken to court.

This got my back up no end and I thought great, I'll see you in court where you'll be made to look like the fools you are.

Anyway, after I calmed down, I contacted the council again, but this time spoke to a manager whose details I had retained the last time I had a council tax query.

She was reluctant to help but when I explained the situation to her, she asked me to put it in writing and she would investigate.

Anyway, a week or so later I duly got a letter confirming they had tracked down my payment - it had been assigned to another property - and that my account had been updated and any proceedings stopped.

Moral - although I was completely in the right, the council had the law on their side. Coupled with the fact you are dealing with jobsworths who don't think twice about wasting tax payers money on un-necessary legal action, it made sense for me to go out of my way to resolve this to prevent further action.

My suggestion is to speak to the VAT office concerned - preferably a manager who will either investigate themselves or assign one of their minions to do it - and get this sorted.

I did that ages ago. HMRC agree that the debt does not and never did exist. It's just this debt company will not speak to HMRC. They have even paid me back the overpayment. HMRC were supposed to be instructing them to call off the dogs but obviously that never happened

[BoredBloke]

I agree with what tykemerc said. Tell 'em all in writing that you don't owe any money and refuse to deal with them on the phone. Send the letters - worth a fiver or two to clear it up surely?
AtW is right in that you should have dealt with it earlier, but that doesn't excuse the way HMRC's agents (the debt collection co) are behaving now.
The debt collection agencies make a lot of money chasing debts that are sold on to them cheaply/ones they can make a profit out of, so are not motivated to help 'sort it out'. There are people on here who have been chased for money they don't owe.
OR if the agency only want £42 just pay 'em and get your rebate from HMRC in the usual way.
OR tell them (in writing) that you will see them in court

Cheapest option?

Good luck anyway (and don't stress about it!)

I'm not stressing, I'm just bloody annoyed. This has been going on for ages. I had q2uite a constructive conversation with the HMRC guy when I first contacted them. His words were 'fill in the replacement return and forget about it' The next HMRC person I spoke to told me that they had the replacement return and that it was rectified on their system. The next one, some weeks on, told me that they should have contacted a debt department within HMRC and she would do this. But at every stage I have told the debt company this. This has been going on for months and the HMRC have been contacted regularly along the way