| Introduction
This section sets out a basic explanation of Magistrates' Court proceedings. A more detailed explanation is available in the Debt
advice for advisers page.
Quite soon after a tax bill has become due, Debt Management and Banking may decide to take action against you in the Magistrates' Court. The purpose will be to obtain an order for payment of the tax that is due.
Many people are very frightened of the magistrates, knowing that they have powers to send people to prison. While this
can happen, it would be most unlikely in the case of a tax debt, unless you ignore a summons to appear in court (see
below).
Also, action cannot be taken in the Magistrates’ Courts for individual tax bills that are:
- over £2,000, or
- more than one year overdue.
What happens first
You should receive a summons which lists the tax due, and tells you the place, date and time of the court hearing.
This will be posted to you at least 4 days before the hearing.
What to do before the hearing
If you pay the tax and costs listed on the summons, before the date of the hearing, no further action should be taken and Debt Management and Banking should tell the court that the action has been stopped.
If you believe that there has been a mistake, and that you do not owe the tax on the summons, you should advise the officer immediately and ask him to contact your tax office. If this will need a little time to sort out, the Debt Management officer may ask the court to adjourn the hearing to allow this. If it is eventually agreed that you do not owe the tax, the action should be stopped. For information about the common types of mistake see the section If you think your tax bill is wrong.
If you want to seek an agreement with Debt Management and Banking, you should contact the office immediately. If it is agreed that you may settle the tax over a period of time, this may simply be accepted by the court. For more information, see Payment
arrangements.
The hearing
The Debt Management officer will present certificates of debt, detailing the amount of tax, interest and/or penalties unpaid,
and will ask the magistrates to make an order for this amount plus costs.
While the magistrates will give you a chance to present your case, it will be extremely difficult to persuade them
that tax demanded by HM Revenue and Customs is not due. Under Section 70 of the Taxes Management Act 1970, the Revenue's certificates
must be accepted by the magistrates as sufficient evidence that the tax is due. So you should be prepared for them to
make an order for payment of the amount shown on the summons and any costs awarded to HM Revenue and Customs.
This is the case even where you have not sent in a tax return and the tax bill is based on a figure decided upon by HM Revenue and Customs - a 'determination'.
One situation where you may be able to prevent an order being made, is if you can bring evidence that you have sent a payment which
HM Revenue and Customs says it has not received. In such a case, the magistrates may agree to adjourn the hearing to allow the matter
to be sorted out.
If you do not dispute the demand, but will need time to settle the amount due, you may ask the magistrates to order
that it be paid by such weekly or monthly instalments as you can afford. It may help to take along evidence of what you
earn, such as recent payslips.
What happens if you do not pay the amount ordered?
If you do not pay an amount ordered by the magistrates, Debt Management and Banking may enforce the order.
You may receive a copy of minute of order for service which warns you that if you do not pay within seven days the Magistrates' Court will authorise a private bailiff to visit your premises with a warrant to legally take possession of your goods to the value of the debt, for sale.
If Debt Management and Banking has exhausted Magistrates' Court options, it may ask HM Revenue and Customs' Enforcement Office, in Worthing, to consider the possibility of taking Bankruptcy Proceedings against
you.
Your credit record
Unlike a judgment of the county court, an order of the magistrates will not appear on your credit record and so should
not affect your ability to borrow money in the future.
Guidance from HM Revenue and Customs
HM Revenue and Customs have prepared fact sheets to help you understand the magistrates' court procedures. These are :
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