Conclusion

This post is dated March 2015 and I am pleased to report that the process was successful, but not for the expected reasons.

HMRC placed the debt in the hands of a debt collector. At this stage I had liquidated the company, ie paid out all its cash as a dividend to its shareholders.

After explaining to the debt collector, that the company has ceased trading and had no assets, they recommend that I ask for the company to be struck off.

So I logged into the company house registry website and requested that the company to be struck off the register. This took a little while, but the debt collector accepted this as a valid reason not to pursue the debt.

Hence - the company's tax bill was not "collected" by HMRC - it was paid by the bill of exchange, but this was not accepted by them. The reason for non collection was that the conaby had not funds and was struck off the register.

Distraint letter

The HMRC needs a major overhaul - or are just plain devious.

The next letter from them is addressed to Mr JW Hodgson t/a ACE 2012 Ltd, at my old address at Pleasant Rise.

So my birth name if that is what you want to called it is Mr RN Hodgson. Mr JW Hodgson resigned as a director some time ago. What is more their letter relates to a corporation tax bill - not a self assessment bill for income tax - so they have addressed the letter incorrectly - in multiple ways.

I will need to explain the the tax amount has been settled by bill of exchange, and that their letter is addressed in correctly.

Third submission

So this is the final letter that I will send to HMRC. HMRC dishonoured the bill of exchange and under the Bill of Exchange Act, they now need to exercise immediate recourse or they lose their rights  - either way the initial bill has no longer to be paid.

and to emphasise the point I included a document from their website:

IHTM19120 which confirms that 

If the holder of a bill of exchange or of a promissory note either unconditionally renounces their rights in writing, or delivers the instrument to the person liable, this discharges the obligations of the acceptor or promissor, even though no consideration is received. So this is an exception to the rule that a unilateral discharge of a debt requires some form of consideration.

Reaction of HMRC (Debt Enforcement) to my second submission

So to recap

1. HMRC sends me a bill (ie a bill of exchange) to pay
2. I reply using their bill converting it into a bill of exchange
3. They reject this and return the bill of exchange
4. I give HMRC a last chance and send a promissory note (last post)
5. HMRC replies and again returns the bill (the promissory note)

The reply is attached

As I had forgotten to send them a stamp (and despite their warning not to "waste departmental costs", they had replied). So I felt I should send them a stamp. see next posting for my final letter.

Second submission (ie reply to first response by HMRC)

After receiving the letter of 15th October from the HMRC, I took advice from people well versed in Bills of Exchange Act 1882.

The key section is 43 (as shown in the previous blog).

I could have treated the letter from HMRC as a non acceptance and dishonour of the bill. But instead I gave them another chance, which was to send a promissory note.

The promissory note is shown below along with the covering notice.

I had the promissory note witnessed by two people - a friend and a commissioner of Oaths - namely Lawson in Peacehaven. To add an extra level to this, Lawson's offices are situated on the Greenwich Mean Time line.

As an added touch, the letter and promissory note were posted to HMRC from the solicitor's offices.

We shall see what the reaction of the HMRC is to this.

Response from HMRC in reply to first response

I received the following letter from HMRC - debt management on 15th October 2013:

Basically they refused to accept my form of payment saying "HMRC only accept payment via the methods shown on our website ... and are under no legal obligation to accept payments by any other method".

But there is no explanation as to why HMRC is not subject to the Bill of Exchange Act 1882.

So this could be taken as non acceptance under Bill of Exchange Act 1882 - section 42

Non-acceptance
When  a bill is duly presented for acceptance and is not accepted within the customary time, the person presenting it must treat it as dishonoured by non-acceptance. If he do not, the holder shall lose his right of recourse against the drawer and indorsers.

The key section is section 43
Dishonour by non-acceptance and its consequences
(1) a bill is dishonoured by non-acceptance-
(a) when it is duly presented for acceptance, and such an acceptance as is prescribed by this Act is refused or cannot be obtained; or
(b) when presentment for acceptance is excused and the bill is not accepted.

(2) Subject to the provisions of this Act when a bill is dishonoured by non-acceptance, an immediate right of recourse against the drawer and indorsers accrues to the holder, and no presentment for payment is necessary.

The situation as I read it, is that of dishonour by non-acceptance under (1)(a) and as HMRC sent back the bill, they are no longer the holder of the bill, I believe their immediate recourse rights are no longer valid. In any case, they have made no attempt to exercise immediate recourse.

First submission to HMRC

After discussion with my colleagues at Pleasant Rise, we decided to start the payment process with a bill of exchange made from the remittance advice attached to the document received from HMRC.

On 30th September, I converted the remittance slip to a bill by

Signing it
dating it
adding the words: Accepted for value Exempt from levy Exemption Acct (my nat insurance number)
adding the amount to the £ total place bottom right

and then endorsing the bill over to the HMRC by signing and dating the reverse of the bill.

The final result is shown on the scanned copy below:

Reverse side (showing endorsement)