Responsibilities of the Official Receiver, Liquidator or Trustee in respect of VAT registered insolvents



78.32 The Insolvency Service and HMRC (Amended September 2012)

In April 2012, The Insolvency Service updated the current partnership agreement with HM Customs and Excise.

The Insolvency Service liaises regularly with HMRC to discuss operational issues and performance in line with the agreement  (see paragraph 78.76). 

78.33 Fees and remuneration

The official receiver when acting as a liquidator or a trustee is not the holder of a public office and VAT is chargeable on taxable fees or remuneration as detailed in Chapter 36 Part 1.

78.34 Initial enquiries where HMRC is the petitioning creditor – bankruptcy only (amended September 2012)

When HMRC is the petitioning creditor in a bankruptcy, a copy of the petition and standard package of information will be provided to the Petitions and Transfers Team, which is part of the Centralised Activities Directorate (CAD), and based in Croydon, as a matter of routine within 4 calendar days of the bankruptcy order. The information will be supplied to official receivers by the Petitions and Transfers Team as a consequence of which no contact should be made with HMRC by way of initial enquiries. There is no agreement for initial enquiries to be made of HMRC in relation to company cases.

The initial package of information will be supplied by HMRC, Enforcement and Insolvency Service, Durrington Bridge House, Worthing, West Sussex, BN12 4SE, and contain the following information:

(a) Case worker details.

(b) Traders full name.

(c) Trading name and address.

(d) Personal address.

(e) Date of birth.

(f) National Insurance number.

(g) Bank/Building Society details.

(h) Any known assets in the last 3 years.

(i) VAT registration, if appropriate.

78.35 Initial enquiries where HMRC is not the petitioning creditor (amended September 2012)

HMRC may be able to assist the official receiver in the provision of initial enquiry information (if known) on new cases (see paragraph 78.34 for the type of information HMRC may hold). This information should only be requested where HMRC are not the petitioning creditor, if the official receiver is unable to obtain the information via other routes. The enquiry should be made to the local Debt Management Unit or Debt Pursuit office dealing with the traders VAT affairs.

78.36 Authority to make enquiries regarding VAT information (inserted September 2012)

The partnership agreement with HMRC (see paragraph 78.32) states that the official receiver will only request information from HMRC to support his/her public functions. These include investigation for the purpose of pursuing a disqualification, bankruptcy restriction order, or submitting a statement of facts, or for statistical and planning purposes.  Information regarding a bankrupt’s VAT affairs only (not tax affairs) can be disclosed without the specific consent of the bankrupt [note 1].  This is because the official receiver as office holder (or any trustee appointed) becomes the taxable person of the business formerly carried on by the bankrupt [note 2].

78.37 First investigation enquiries to obtain VAT (indirect taxes) information (inserted September 2012)

When information is required about a traders VAT affairs (company or individual), the first enquiry letter should be sent by email to, (the Enforcement and Insolvency Service office in Worthing, see paragraph 78.42).  Enquiries should be made on the relevant letter template, DDU1, which is available on document production.  Please note DDU Liverpool no longer deal with these enquiries.

If the standard letter (see paragraph 78.38 below) duplicates information that is already held, i.e. instances where HMRC have petitioned and provided claim details, that request should be deleted from the standard letter before sending. 

78.38 First enquiry letter to HMRC  (inserted September 2012)

The Service has agreed with HMRC that the official receiver will make further enquiry requests in two stages, and in the first stage only the following information will be requested (on document production template DDU1, see paragraph 78.37):

Direct taxes

(a)   Details of amounts outstanding at the date of insolvency.

(b)   Type of tax the debt relates to.

(c)   Period the debt relates to.

Indirect taxes

(d)   A copy of the VAT 1 registration application form.

(e)   A copy of the outstanding liability table.

(f)     Copies of period details for the last three years VAT returns.

(g)   A copy of the traders accounting detail (including dropped ledgers).

HMRC Enforcement and Insolvency Service has agreed to send a BROCS print out (relating to direct taxes, see Chapter 77, paragraph 77.93) with the response to the initial letter along with the VAT ledgers (see paragraph 78.47 on interpreting this information).

78.39 Length of tax histories to be requested (inserted September 2012)

The official receiver should not routinely request VAT histories covering more than three years prior to the winding up or bankruptcy order. Where it is necessary to request VAT histories exceeding this three year period, the official receiver should explain the reasons for this when submitting the request. HMRC will consider such requests on a case by case basis.

78.40 Second enquiry letter to HMRC (inserted September 2012)

If, after interpretation of the VAT ledgers sent by HMRC (see paragraph 78.47), it is considered that the case warrants further investigation, then the second enquiry letter should be sent to HMRC requesting further information (see paragraph 78.41 below).  Any second letter sent, should be addressed to the individual named in the initial response received.   

78.41 Second enquiry letter (inserted September 2012)

Additional information must not be requested as a matter of routine. As no template is available for the second enquiry letter, it should be drafted and tailored to the information required.  The letter should explain the reasons why the additional information is required and additional requests should be in line with the disclosure guidance in the partnership agreement (available on the ORBS intranet site). If HMRC Enforcement and Insolvency Service (Worthing) receive correspondence seeking detailed information but have not received a first enquiry letter (see paragraph 78.38) they will treat the request as if it is a first stage request and only provide the information they would normally provide in response to the first letter.

78.42 Address for first and second enquiries of Worthing (inserted September 2012)

All investigation enquiries regarding VAT should be sent to the Enforcement and Insolvency Service Team in Worthing. Investigation enquiries should now be sent by secure email (gsi) to  The email subject heading should follow a standard format and either begin with DD1, DD2, BRU1 or BRU2 according to whether it is a first or second enquiry, and relating to either a potential disqualification or bankruptcy restriction.

The email should have the appropriate attachments, the standard template letter setting out the information requested (see paragraph 78.38 above), or the second letter addressed to the individual named in the initial response received (see paragraph 78.41), and, if appropriate, the letter of authority from the insolvency practitioner liquidator.

78.43 Timescales for reply (inserted September 2012)

HMRC will respond to requests for information within 30 working days of receipt of the email or hard copy letter, or within 15 working day for PIU cases.  The response will either be the provision of information relevant to the enquiry or an explanation why the request cannot be fulfilled.  HMRC will issue responses through the DX system due to the volume of paperwork likely to be involved.

78.44 Reminder letters (inserted September 2012)

The official receiver should not send reminder letters chasing a reply to the enquiry until the 30 or 15 working days has elapsed as appropriate.

78.45 Keeping HMRC informed of case interest (inserted September 2012)

Caseworkers at the HMRC Enforcement and Insolvency Service have requested that official receiver staff contact them when the official receiver no longer have an interest in a case, which will enable them to close cases down and move onto other work.  Contact should be made directly with the caseworker who supplied the VAT information to the official receiver informing them that the investigation is now concluded.

78.46 Report following a successful investigation (inserted September 2012)

Where the official receiver's investigation ultimately results in a successful conclusion to a criminal allegation, or a disqualification order or a bankruptcy restrictions order being made, the official receiver must issue a further report to creditors informing them of the outcome (see Chapter 18, paragraph 18.21) [note 3]. A copy of the further report to creditors should be sent to the caseworker who has dealt with the previous enquiries at HMRC, Enforcement and Insolvency Service, Durrington Bridge House, Worthing, BN12 4SE, as this report is the result of The Service’s investigations, usually with the help of the tax/vat information received from the team.

It should not be sent to Insolvency Claims Handling Unit (ICHU) as ICHU only deal with insolvency claims they are unable to act on this information.

78.47 Interpretation of information received from HMRC (inserted September 2012)

The People Learning and Development Team have designed a training guide called “Guide to Interpreting HMRC Ledgers”, which provides guidance with interpreting VAT ledger codes.  Additionally, two members of staff from each official receiver’s office have been trained in interpreting the VAT ledgers received from HMRC.  It is for each office to arrange the cascading of that training to other members of staff within their own office. The PowerPoint presentation from that training session is at Annex B

78.48 Notification of Insolvency (form VAT 769) (amended September 2012)

In every case where the insolvent is registered for VAT, the official receiver should complete HMRC form VAT769 (notification of insolvency) (available as Annex A), as soon as possible and indicate on the form whether deregistration is appropriate (see paragraph 78.67 to 78.68). This form is the initial document informing HMRC of the insolvency. Where possible the VAT number should be provided. If this is not available the form should still be sent as HMRC will attempt to locate the case through searches.

HMRC have requested that the VAT769 be sent electronically, an electronic version of VAT 769 is available at Annex A.  The completed form should be sent to when the initial notices are sent. The VAT769 should be dispatched at the earliest opportunity, even if HMRC are not listed as a creditor.

The VAT769 form should no longer be sent by post.

78.49 VAT number to be recorded on ISCIS (inserted September 2012)

To assist HMRC in the location of a case it is important that the VAT number is added to ISCIS in the trading/COI tab as soon as it is known and that a VAT769, is sent to the (see paragraph 78.48). See also paragraph 78.62 for guidance where the VAT number is not known.

In cases where the petition debt is for VAT, the VAT number will be on the petition and the number should be entered onto ISCIS as soon as the petition is received in the office (or when the case is added to ISCIS, if this is later).

78.50 VAT de-registration not appropriate (inserted September 2012)

Where it is not known at the initial stage of a case whether VAT de-registration will be appropriate, the VAT769 should be completed but the relevant box on the form requesting deregistration should not be ticked. A second VAT769 should not be submitted as HMRC automatically issue a de-registration enquiry form VAT167 when notified of the insolvency. If the VAT167 is not completed and returned HMRC will issue a final reminder VAT168. Both the VAT167 and VAT168 forms contain a box to be ticked requesting that the company not be de-registered.  

78.51 General HMRC help desk (inserted September 2012)

HMRC can be contacted directly in relation to any VAT queries by telephoning their helpdesk on 0151 242 8267.

78.52 Return of VAT forms sent to official receiver (inserted September 2012)

If the official receiver receives a VAT return, Certificate of Registration for VAT or Insolvency de-registration enquiry letter on behalf of the insolvent trader from HMRC, it should be returned, with a compliments slip, to:

National Insolvency Unit (NIU)


5th Floor

Regian House

James Street


L75 1AD

78.53 Annulment notification – ought not to have been made (inserted September 2012)

Any matters relating to ‘ought not to have been made’ annulments on HMRC petitions should be addressed directly to the caseworker at HMRC, the contact details of whom are shown on the information sheet provided by Enforcement and Insolvency Service (Worthing), see paragraph 78.34).  

78.54 Annulment notification – payment in full (inserted September 2012)

When notifying HMRC of any matters relating to payment in full annulments, the notice or communication should be sent to the ICHU contact listed under HMRC within the Partnership Agreement, Appendix A on the ORBS intranet site.

The relevant VAT registration number should be included with all requests.

78.55 Statutory insolvency notices and reports to be sent electronically  (amended September 2012)

Where HMRC are listed as a creditor in insolvency proceedings, all statutory notices and reports should be sent by email to  Statutory notices and reports should no longer be sent by post.  See paragraph 78.57 for a list of statutory notices that can be sent electronically.

78.56 information to be included with email (inserted September 2012)

The VAT number should be included with all correspondence sent to the ICHU (see paragraph 78.55).

The ICHU’s post team has access to this email account and rules have been set up to automatically file the notices. It is therefore important that the emails are titled with;

1. the ISCIS code for the document,

2. the case name, and

3. VAT number.

For example: RTC NMN – Bankrupt’s name – VAT number.


78.57 Which statutory notices to be sent electronically (updated October 2013)

The following is a list of the statutory notices which should be sent electronically to HMRC, with the document production code provided at the beginning of the title of the email as per paragraph 78.56:

EDNCR – early discharge and combined release notice(not applicable where the bankruptcy order is made on or after 1 October 2013)

EDNOT – early discharge notice(not applicable where the bankruptcy order is made on after 1 October 2013)

EDOBJ – early release objection info request(not applicable where the bankruptcy order is made on or  after 1 October 2013) NABO – annulment notice

NFM – notice of 1st meeting

NGM – notice of general meeting

NNM – no meeting notice

NORAD – notice of release and dividend

RTC – report to creditors

PEN – Public examination notice


78.58 Sending statutory notices by email (inserted September 2012)

At the moment it is not possible to email a document directly when generating the document in ISCIS.  Statutory notices can be sent electronically by generating the required form in ISCIS in the usual way, and submitting it to the Wisdom file plan.  An email can then be generated from within Wisdom by:

(a)   Clicking on the (drop down menu) next to the document reference number and selecting “Email Document”.

(b)   Entering the email address in the “To” box.

(c)   Ensure that “send documents as attachment” is ticked.

(d)   Ensure that the correct email title is in the subject box (see paragraph 78.56).

(e)   Click “Send”.

Whilst there is nothing to indicate within Wisdom that a document has been emailed, there is an Audit Search function that can identify documents that have been emailed.

78.59 Where correspondence sent electronically to HMRC in error (inserted September 2012)

If correspondence not required by ICHU is received in error, this would stay in the email account and will be returned by email to the sender.

See paragraph 78.46 for where to send further reports to creditors following a successful investigation.

78.60 Request for proof of debt (inserted September 2012)

Where HMRC are sent the report to creditors as part of the statutory notices, it should be sent to the ICHU (see paragraph 78.55).  Where there is a need to obtain a proof of debt from HMRC (perhaps, in respect of dealing with a distribution), in respect of VAT, excise duties, environmental taxes and other taxes formerly collected by HMRC a specific request should be sent to the NIU, see the Partnership Agreement, Appendix A on the ORBS intranet site.

78.61 Other information required from HMRC (amended September 2012)

Where information is required from HMRC, other than for details of the insolvency claim (see paragraph 78.55), or investigation enquiries (see paragraph 78.37), the enquiry should be directed to the local HMRC office. That is the office that handles, or has handled the insolvent's VAT affairs. It is the address of this office which is most likely to have been included by the insolvent in the preliminary information questionnaire.

78.62 VAT Number not known

It is time consuming for HMRC to locate a business where the VAT number is not available on communication received and the VAT number should be included on all correspondence where possible.  In exceptional circumstances HMRC may be contacted without quoting the VAT number as HMRC can, when resources permit carry out extensive searches to locate the case in question, e-mail enquiries should be sent to or alternatively HMRC can be contacted on 0151 242 8793.

78.63 Verifying the insolvent's VAT number

The official receiver can verify that the insolvent has disclosed a valid VAT number via the website of the European Commission

This website will verify the validity of a UK or other European Union member state VAT number. 

78.64 Submission of VAT returns for last business period

If a return (see paragraph 78.12) for an insolvent has not been submitted for the last business period, an assessment of the amount owed will be raised by HMRC. 

The insolvent business is responsible for submitting any outstanding pre-insolvency returns. The official receiver as liquidator/trustee may submit a return for any relevant period for which the insolvent has not submitted a return. The official receiver should not sign the return, but should mark it "completed from the books and records of the company/trader."

The final pre-insolvency return covering the period up to the date of the insolvency order will be issued automatically where required by HMRC to the official receiver following receipt of the VAT769 (see paragraph 78.48). This return will not be subject to a default surcharge (see paragraph 78.21).

78.65 Issue of tax invoices by the official receiver

The official receiver may be requested to issue a tax invoice (see paragraph 78.11)  where taxable goods or services have been supplied to the insolvent prior to the insolvency order but no tax invoice has been issued in respect of such goods and services. If the records available to the official receiver clearly confirm the transaction in question the official receiver should comply with the request. The Insolvency Service has a standard format for all invoices and a copy of the standard invoice form and guidance notes on how to complete the form can be found in the  Finance Handbook.

Where the records of the insolvent are incomplete or inadequate to accurately confirm the transaction the official receiver should advise, in writing, the person requesting the issue of the tax invoice of his/her inability to do so, copying such advice to HMRC.

78.66 VAT Deregistration

Deregistration is the process by which a VAT registered business is removed from the VAT register with HMRC and the VAT registration number is cancelled. The VAT legislation contains provision for the deregistration if a business where the level of sales or services and tax payable is below a defined limit, the criteria for which is updated annually. Current limits are detailed in VAT leaflet 700/11 available on 

Deregistration may occur when a registered business or person satisfies HMRC that they have ceased to make (and/or ceased to intend to make) taxable supplies or from such later date that might be agreed with HMRC. 

78.67 Automatic deregistration

The receipt by HMRC of the notification of insolvency form VAT 769 (see paragraph 78.48) triggers the automatic deregistration process and a deregistration questionnaire [note 4] will be issued by HMRC to the official receiver or insolvency practitioner subsequently appointed to establish the level of stock and assets in the liquidation. 

If this form is not returned to HMRC within five weeks, a warning letter [note 5] will be issued by HMRC, and if this is not responded to within seven days, deregistration automatically occurs on the eighth day.  

Once deregistration has occurred, a final return [note 6] will be issued by HMRC covering the period from the first day after the end of the last accounting period up to the day before the date of deregistration. The official receiver should complete and return this form to HMRC, even if it is a nil return.

If at any time during the above process the official receiver considers that deregistration is not appropriate HMRC should be informed immediately and the process will be suspended.

In the event that deregistration has occurred and it is later ascertained that a liability or repayment does in fact exist then any tax payable or refundable may be dealt with manually by completion of forms VAT 833 (input tax) and VAT 833 (output tax) which may obtained from HMRC on request.

78.68 Where deregistration is not appropriate

Deregistration will not be appropriate where:

a) the appointment of an insolvency practitioner is envisaged; or

b) any VAT liability arising subsequent to the insolvency order exceeds, or is likely to exceed £1,000 presently representing gross proceeds of sale or realisations not exceeding £5,714 (VAT on stocks and assets does not need to be accounted for to HMRC where the total VAT on them would be £1,000 or less); or

c) the business of the insolvent is being continued; or

d) an application for a stay of advertisement or proceedings, annulment, rescission or an appeal against the insolvency order has been made.

In all these circumstances it is essential for the smooth operation of the procedure outlined above that the official receiver should return the deregistration questionnaire [note 4], indicating the reason why deregistration is not appropriate.

78.69 Bankrupt continues to trade

If a bankrupt is registered for VAT and intends to continue to trade post bankruptcy, the official receiver should notify HMRC without delay so that the VAT registration number may be kept open. In such circumstances the control of the continuing business will revert to the local VAT office.

When a bankrupt continues to trade post bankruptcy the bankrupt retains responsibility for the submission and payment of VAT returns covering the post-bankruptcy periods. HMRC will seek to establish a pre-bankruptcy position in order to lodge a claim in the bankruptcy proceedings or make a repayment to the trustee, or operate Crown set-off (see paragraph 78.29) as appropriate.

78.70 Continuity of business; realisation of assets

Where, for any reason, the business of the insolvent is continued or assets of any substance remain for realisation, the estate should remain registered for VAT until such times as the business is finally terminated or disposed of or deregistered as being under the minimum level of turnover to require registration (see paragraphs 78.66 to 78.68). The official receiver must observe the VAT responsibilities of the insolvent, including the submission of returns and payment of tax and will need to keep a VAT account of his/her trading activities or his/her realisation of assets (see Part 1 paragraph 78.11). Such account supported by tax invoices, should record all input and output tax including VAT on trading payments, expenses or costs of realisation etc. A copy of the VAT account should be maintained in or with the estate record book  [note 7] and should be passed to any insolvency practitioner appointed as liquidator/trustee.

78.71 Post-insolvency returns where insolvent is not deregistered

In insolvency normal VAT liability rules apply to all transactions, whether the business is being operated as a going concern or the assets are being realised. 

Post insolvency returns are issued to the official receiver as liquidator/trustee office holder on a monthly/quarterly basis for as long as the insolvent remains registered for VAT. Where the official receiver is liquidator/trustee he/she has a responsibility to complete and submit the returns to HMRC from the date of his/her appointment  and to account for any VAT due on the submission of each return. Where the input tax exceeds the output tax (see paragraph 78.9) repayment is due and HMRC will make this to the official receiver as liquidator/trustee, unless there is a Crown debt to be set off (see paragraph 78.29)

Where an insolvency practitioner has been appointed as liquidator/trustee any returns received from HMRC should be forwarded to the insolvency practitioner. Where an insolvency practitioner is appointed as successor to the official receiver or another practitioner he/she is under a duty to notify HMRC of his/her appointment within 21 days.

For guidance on the completion of a VAT return form see  Case Help Manual - VAT

78.72 Disposal of private assets in bankruptcy 

Any sale of the private assets of a bankrupt whose business is registered for VAT purposes is not in the course of business and VAT is neither chargeable or recoverable in respect of any related expenses.

78.73 Insolvent not registered for VAT

Where the official receiver ascertains that an insolvent has not registered as a taxable person (see paragraph 78.8) although required to do so, HMRC should be advised accordingly. Notification should be sent via e-mail to HMRC have extensive powers to impose penalties for deliberate non compliance with VAT legislation. The official receiver should admit as a debt in the proceedings only the VAT ascertained to be due at the date of the insolvency order and should exclude any penalty which had not been quantified and imposed at the date of the insolvency order.

If the insolvent was not registered but was required to be registered at the date of the insolvency order, the official receiver need not apply for registration, unless as a result of carrying on the business or the disposal of assets, excluding capital assets formerly used in the business, the taxable turnover is expected to exceed £1,000.

Application for voluntary registration may be made in any case where the official receiver considers this to be beneficial to the insolvent estate. Such a position might apply where the business of the insolvent related to the supply of an 'exempt' service e.g. the business of an ophthalmic or dispensing optician where the official receiver might incur input tax on professional services relating to the continuation, valuation or costs of sale of the business. Any such application will need to be carefully evaluated to ensure that the advantage of recovery of tax will not be outweighed by the obligation to account for tax which might then become payable on the sale of any 'non-exempt' assets of the insolvent estate.

78.74 HMRC and Secretary of State appointments of an insolvency practitioner (amended September 2012)

HMRC have informed The Insolvency Service that in some cases where they are petitioning creditor they may have an interest in the liquidator or trustee pursuing recovery of assets more actively than usual, or there may be cases in which they have a special involvement. In these instances their interest as a creditor may be frustrated by simply appointing an insolvency practitioner from the rota and that in such instances they would like to have the chance to exercise their voting rights as a creditor in the proceedings. 

The most efficient way for HMRC to give notification of their interest in a case where they are petitioning creditor is to ask their solicitors to note the cover sheet from them to that effect.  If the cover sheet does not contain such a note, then the official receiver may appoint from the rota, see Chapter 17, paragraph 17.67.

If, in exceptional circumstances, HMRC’s consent is to be sought for an appointment when they are not the majority creditor, contact should be made via the General Insolvency Help Line  01903 701037. 

In HMRC petition cases, any approach from an insolvency practitioner purporting to be representing HMRC seeking nomination should in the first instance be referred to the above.

78.75 HMRC litigation budget (amended September 2012)

HMRC hold a small litigation budget, a fund which can be drawn upon by insolvency office holders who require funding to take legal proceedings to pursue and recover assets for the benefit of creditors.  HMRC will consider each application for funding on its merits in the light of the prospects of success and the likelihood of a net benefit. The official receiver will need to provide HMRC with full details of matters to be considered and details of any other creditors interested in supporting the proposed action.  An indication of the likelihood of success of any action to be taken and the possible net benefit to creditors should also be provided. The official receiver should address correspondence on this matter to HMRC, Enforcement & Insolvency Service, Durrington Bridge House, Barrington Road, Worthing, BN12 4SE.

78.76 The Insolvency Service contact with HMRC (amended September 2012)

Regular meetings take place between The Insolvency Service (ORBS, Service Delivery Team) and HMRC to discuss problems encountered by the official receiver with the aim of resolving them at the earliest opportunity.