Statutory demand

Role of bankruptcy court in tax proceedings

The taxpayer was Portuguese and worked as a minicab driver. He claimed that he did not speak read or write English well.

In July 2010 HMRC opened an investigation on the ground that the taxpayer had underdeclared his income. In September 2013 HMRC issued a statutory demand for tax interest and penalties of £30 000. It sent a second demand in July 2016 for £180 000. The taxpayer applied to the deputy registrar to set aside the second demand claiming that he owed only about £2 113 – which he paid. The deputy registrar refused to set aside the demand so the taxpayer appealed to the High Court. He also made a late appeal to the First-tier Tribunal against the tax assessments raised by HMRC.

The issue concerned Practice Direction – Insolvency Proceedings para 13.3.3: ‘Where...