News1 min ago
Debt relief orders
3 Answers
My friend has been advised to go for a Debt Relief Order as she now has a very low income. If her financial situation has not improved after 12 months these debts may be written off. However, she also owes over £1000 to the Inland Revenue due to over-payment of Tax Credits. Am I correct in thinking that this debt cannot be included as part of the debt relief as it is in effect owed to the Government ?
Thanks in advance for any advice.
Thanks in advance for any advice.
Answers
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I was expecting my answer to your question to be "Yes, you're correct".
However the list of debts which can't be covered by a DRO, in the official guidance from the Insolvency Service, makes no reference to money owed to HMRC:
http://www.insolvency...fletspdf/droguide.pdf
Chris
However the list of debts which can't be covered by a DRO, in the official guidance from the Insolvency Service, makes no reference to money owed to HMRC:
http://www.insolvency...fletspdf/droguide.pdf
Chris
Any debt to HMRC (whether it is for tax credit overpayment or income tax or whatever) can be included in a DRO.
But for tax credits, it must be a debt which has "finalised". This means it has to relate to a tax year which has ended & for which the annual declaration has been done. HMRC then have to have issued a notification that the money has been overpaid and they require it to be paid back.
But for tax credits, it must be a debt which has "finalised". This means it has to relate to a tax year which has ended & for which the annual declaration has been done. HMRC then have to have issued a notification that the money has been overpaid and they require it to be paid back.
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