DMBM555070 - Debt and return pursuit: tax credits: general: insolvency
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Bankruptcy and Sequestration (England, Wales and Scotland)
Single claimant
Where the bankrupt is a single claimant and there is an IDMS work item for an overpayment the DTO should change ownership to the Insolvency Claims Handling Unit (ICHU) as in INS2107.
ICHU will lodge a claim for the amount outstanding.
If there is no IDMS work item for the overpayment ICHU will, provided the TCO is not recovering the overpayment by deduction from ongoing entitlement call off the amount on IDMS to enable a claim to be lodged.
On lodging a claim ICHU will remit the overpayment in the normal way.
If the TCO is recovering the overpayment by deduction from ongoing entitlement ICHU will not lodge a claim in the bankruptcy.
Joint claimants
Where the bankrupt is a joint claimant and there is (or subsequently there is) an IDMS work item for an overpayment, the DTO should
- retain ownership, but
- recover the amount from the upstanding claimant, then
- notify ICHU by memo of the amount recovered.
ICHU will, on viewing the NTC record in such cases,
- make a note of the amount to claim (but not remit the debt) and
- reduce the claim when notified of the amount recovered by the DTO.
If the TCO is recovering the overpayment from either of the claimants by deduction from ongoing entitlement ICHU will not lodge a claim against the bankrupt claimant.
Bankruptcy (Northern Ireland)
The above guidance for England and Wales applies generally to Northern Ireland. You should change ownership in single claimant cases to EIS Edinburgh (Belfast Team) (362701). Throughout the above guidance EIS Edinburgh (Belfast Team) will take similar action to ICHU.
Trust Deeds (Scotland)
When a Scottish Trust Deed is executed, in a single claimant case, EIS Edinburgh will, when there is an IDMS work item for the overpayment
- contact the DTO and
- ask it to change ownership to 362301.
If there is no IDMS work item for the overpayment EIS Edinburgh will take similar action as ICHU.
In a joint claimant case similar arrangements apply as for sequestration above except that following recovery from the upstanding claimant the DTO should advise EIS Edinburgh (instead of ICHU).