Client received award notice last April (on a Friday)and noticed that income and bank acc details were wrong. Called IR on the Monday and corrected these details only to be told that £2k had been paid into the bank acc. As she had been made bankrupt this acc should not have been used and the £2k was swallowed up by the bank. She cannot get hold of the £2k to repay the IR. Her award notice did not say that she should have been paid this £2k anyway but now they are demanding it back. She is not entitled to TC now so overpayment is being demanded in full. Usual story of client writing and phoning on a monthly basis all to no avail - surely this should be an issue between the IR and the bank?? or is that too obvious?
Any ideas??????

1. Whose fault was it that the wrong bank account was used? Had client given TCO the correct one? If so, the payment was TCO error, which client did all they could to coorect (by telling TCO details were wrong asap after getting notification) so should be irrecoverable.

2. Even if 1 is not applicable TCO apparently paid £2K which client was not entitled to (or which was not made clear on the award notice). How did this happen? Was client entitled to this money? If not, its payment was another TCO error which - as there was nothing on the award about it - client could not reasonably expect to know about, so is irrecoverable.

3. If client was bankrupt at the time, I am surprised the bank was able to keep the £2K. I think it should have gone to the OR from the bank, as the bank - in keeping it was putting themselves in a preferential position in comparison with other creditors. Perhaps this could be pointed out to the bank - by TCO? - & they might then release the money back to TCO (optimist!)

4. Go through the complaints procedure.

If she was paid the money in error it might be arguable that it was never hers, ie HMRC might be able to argue it should not have been taken to satisfy her debts and whoever currently has it might have to pay it back. She hasn't anyway. But I agree - how did the bank get its paws on the mon if she is bankrupt? They must know and I would think her trustee in bankruptcy would be jolly intrigued to know what has happened. Are you sure she really is legally bankrupt? If so the Trustee in Bankrupcy is the person to contact - they might be better placed to sort this out than the client, and both the bank and HMRC more inclined to listen.