HMRC can sue for unpaid tax in the county court in England and Wales, usually where the debtor has assets or income and will not pay. If the claim is not answered within 14 days of service, judgment is entered in default, and a county court judgment stays on the public register for six years unless paid within a month. Defences are narrow: you generally cannot argue about the amount of tax in court if you had a right of appeal to the tax tribunal and did not use it.

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When does HMRC go to the county court?

Section 25(1A) of the Commissioners for Revenue and Customs Act 2005 allows an HMRC officer, or a person authorised by the Commissioners, to conduct county court proceedings to recover any amount payable to HMRC under an enactment or a contract settlement. HMRC’s public guidance says it uses county court processes where the debtor has assets to cover the debt and refuses to pay.

HMRC’s Debt Management and Banking Manual at DMBM665060 describes county court action as slower than other methods but effective, particularly against large businesses and professional taxpayers who would not welcome a judgment against them. Proceedings are only started where the defendant lives in England and Wales. There are no county courts in Scotland, where HMRC uses summary warrants and sheriff court action, and the manual says debt offices do not currently use the Northern Ireland county courts (DMBM665020).

Before a case is sent for proceedings, the checklist at DMBM665140 expects a final warning of court action within the previous three months, attempts to phone at different times, confirmed residence and recent information about the debtor’s finances. Earlier steps usually include letters, phone calls, possibly a field force visit and consideration of taking control of goods.

How does the claim work?

HMRC brings claims in the name of the Commissioners for His Majesty’s Revenue and Customs under Part 7 of the Civil Procedure Rules, as a claim for a fixed sum (DMBM665060, DMBM665100). Most claims are issued electronically through the court’s bulk claims centre, which the manual calls the County Court Bulk Centre. Those claims are issued in the name of Northampton (CCBC) County Court, though any hearing takes place at a local court (DMBM665030). The bulk route cannot be used where the debt including interest is £100,000 or more, for partnerships with more than two partners, or where the defendant’s address is outside England and Wales (DMBM665050).

For a bulk centre claim, service is deemed to take place on the fifth day after issue (DMBM665390). The defendant then has 14 days to respond. Filing an acknowledgment of service extends the time for a defence to 28 days from deemed service (DMBM665620). If nothing is filed, judgment in default is entered automatically 22 days after issue in bulk centre cases (DMBM665640). The manual notes that most defendants do nothing in the time available.

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What can you do when the claim arrives?

  • Pay. Paying the debt, interest, court fee and fixed costs ends the claim.
  • Admit and offer instalments. Form N9A admits the claim, with an offer of payment supported by a statement of means. HMRC considers whether the offer is acceptable (DMBM665730).
  • Defend. Form N9B is used to defend, or to admit part and defend the rest.

Tax claims benefit from Practice Direction 7D to the Civil Procedure Rules. For income tax, corporation tax, capital gains tax, National Insurance, VAT, student loans and a list of other taxes and duties, a defended claim is not allocated to the normal case management track but is listed for a hearing at which the court can deal with it quickly (DMBM665800).

What defences actually work?

Very few, because of what HMRC calls the finality principles (DMBM665910). Where the taxpayer had a right of appeal to the First tier Tribunal against an assessment or amendment and did not use it, or the appeal was decided or settled, the tax is final and its merits cannot be reopened in the county court. HMRC relies on Inland Revenue v Pearlberg (1953), in which Lord Denning said issues of fact or law should have been decided on appeal. The manual also notes there is no right of appeal against your own self assessment, a Self Assessment or Corporation Tax determination, or employer liabilities.

A counterclaim is not a defence either. Civil Procedure Rule 66.4 prevents a counterclaim in Crown proceedings to recover tax, so a defendant cannot argue that HMRC owes them a repayment (DMBM665740). That is a point for set off with HMRC, not the court.

Defences that can succeed, or at least pause the claim, include:

  • The notice was never received. DMBM665810 calls this the most important defence. Unless HMRC has clear evidence the notice was received, officers are told to accept the defence, serve a fresh notice, allow a new appeal period and ask for an adjournment.
  • The debt has been paid. A states paid defence triggers form N236; HMRC must investigate and either continue or withdraw (DMBM665820).
  • The return displaces a determination. Where the claim is for an HMRC determination, filing the return replaces it. HMRC will press for judgment until the return is filed and processed, but the manual accepts judges are often reluctant to enter judgment once a return is in (DMBM665830).
  • Interest is wrong. Disputes about payment dates, allocation or the date interest runs from are investigated and the claim reduced if HMRC cannot disprove them (DMBM665870).
  • A late appeal or postponement application. If an appeal is made and accepted, HMRC asks the court to adjourn; where only part is postponed it seeks an interim payment of the rest (DMBM668340). See late appeals to HMRC.

What does a county court judgment mean?

The judgment orders payment directly to HMRC, either immediately, on a set date or by instalments, and warns of the consequences of not paying (DMBM666320). GOV.UK explains that judgments stay on the Register of Judgments, Orders and Fines for six years, which lenders use when deciding on credit. If the full amount is paid within one month, the entry can be removed; if paid later, it is marked as satisfied but stays on the register for the six years. A certificate of cancellation or satisfaction costs £19.

A judgment can be set aside on application using form N244 (fee £321) where the money is not owed or the original claim was not received or answered. HMRC’s manual says it will refuse to consent to setting aside a correctly entered judgment just because the debt has since been paid, and will oppose applications based on late payment, but will not oppose one where the debt has been extinguished, for example by filing returns (DMBM666330, DMBM666380).

What can HMRC do after judgment?

If the judgment is not paid, HMRC can use the court’s enforcement methods, including charging orders over property, attachment of earnings orders, third party debt orders and warrants of control. HMRC’s guidance says it does all it can to avoid forcing the sale of a main home and will not make you sell your main home to fund a loan charge or disguised remuneration bill. The manual notes that the Limitation Act 1980 does not apply to judgments, so enforcement remains possible years later, although some methods need the court’s permission after six years (DMBM665210). For how long HMRC has to sue in the first place, see our guide to the time limit on HMRC collecting tax debts. Interest also keeps running after judgment, and HMRC reserves the right to claim it later (DMBM665870).

How might this work?

Illustration only. A consultant ignores £18,000 of Self Assessment tax for two years, despite letters and a final warning. HMRC issues a claim through the bulk centre. The consultant files a defence saying the bill is too high. Because the tax comes from the consultant’s own return, there is no appeal right to fall back on and the defence fails at a short hearing. Judgment is entered with an order to pay immediately. The consultant pays within three weeks, so the register entry can be removed. Had the claim been for an estimated determination, filing the missing return before the hearing would have been the right response.

What mistakes do people make?

  • Ignoring the claim form. Default judgment follows automatically.
  • Arguing the tax is wrong when the appeal deadline passed long ago. Make a late appeal to HMRC instead.
  • Counterclaiming for a repayment. The rules prevent it.
  • Paying after a month when paying within a month was possible. The difference is removal from the register versus six years marked satisfied.
  • Not asking for Time to Pay early. A Time to Pay arrangement agreed before proceedings avoids the judgment altogether.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.