Yes, I have had a similar experience with the HMRC scum!
I was pursued for around £50,000 when in fact I owed them no more than £5,000. The latter I offered to pay by instalments but they refused to accept them.
In the end I bankrupted myself and HMRC never saw one single solitary penny from me!
They really went to town on me - by the time they started pursuing me, I had moved to Belgium so they transferred my debt to the Belgian tax collector who then put the bailiffs in who broke into my home to list all the things they were to be taken to pay the debt.
However, as they've given me several weeks warning, I had made quite sure that there was nothing whatever of any significant value in the house!
When I phoned my accountant in England and told him what was happening, he said that I only owed a maximum of around £5,000 but that the inland revenue were well known for massively inflating tax bills to scare people into paying. The problem, he said, is that it will cost you around £10,000 worth of my time to prove to the inland revenue that you only owe them £5,000 not £50,000 so, the question is do you have £15,000 kicking around in your bank account to pay for that. If you don't, probably the best answer in your situation is simply to bankrupt yourself then you won't have to pay them a penny piece; Not even even the tax you really do owe them!
The bankruptcy had to be enacted at the High Court in London as I was an overseas resident but it was painless and took only a day including the visit to the Official Receiver.
The woman at the Overseas Tax Collection office in Bootle who was looking after my case, went absolutely spare saying that she refused accept my bankruptcy and would continue to pursue the debt. I did suggest she think again about that, as she would then be in contempt of court but she persisted.
I then contacted the Official Receiver who said that he wished they would teach civil servants at least the fundaments of English law. Let her stew for a bit and if she insists on continuing to try to collect the debt, get back in touch and I will take action. He continued that the original debt was extinguished by the bankruptcy and therefore no continued attempt to collect it either in the UK or overseas was legitimate. He went on to say that he was quite happy to go before a judge and request the imprisonment for contempt of court of an uppity civil servant who refuses to obey the law
Of course the complicating bit was that that they had passed the debt to the Belgians who had in turn passed it to local bailiffs for collection. The latter declined to stop collection action even when I informed them that the debt was extinguished as they said they would only accept that instruction from the people who instructed them namely the Belgian tax authorities and the latter said they would only accept it from HMRC. They finally relented when I informed them that if they continued collection action over a debt that was subject to a bankruptcy order, should they ever go to the UK they could be liable for arrest and imprisonment for contempt of court. That put a stop to the bailiffs.
In the end I threatened the civil servant in Bootle with the Official Receiver and suggested she might end up be imprisoned for contempt over Christmas and the New Year (highly unlikely but she was too stupid to realize that). I received a phone call from her on Christmas Eve to say that they had "accepted" my bankruptcy and that they would inform the Belgians and ask them to stop collection action.
Trying to collect the £50,000 I never owed them must have cost them 10s of £1000s all for nothing!
The rampant incompetence of the HMRC and other UK civil service departments is truly unbelievable.
