Chapter DMBM665740
| Published date | 29 April 2016 |
| Record Number | DMBM665740 |
Counterclaim not valid
Counterclaim on its own or where the entire defence is a counterclaim
Counterclaim forms only part of the defence
Challenge that Civil Procedure Rule 66.4 does not include NIC (excluding Class 2)
Counterclaims to claims for Class 2 NIC
Challenge that the proceedings are not brought by the Crown
Part 20 claims
Part 66.4 of the Civil Procedure Rules 1998 prevents a counterclaim in proceedings by the Crown for the recovery of taxes, or duties recoverable as if they were taxes. The defendant cannot claim to be due a repayment of tax.
The form N9(B) tells defendants that they “may not be able to make a counterclaim where the claimant is the Crown (e.g. a Government Department)”.
Any defence that takes the form of a counterclaim should be treated as invalid. Nevertheless you will receive counterclaims from time to time.
Counterclaim on its own or where the entire defence is a counterclaimIf you receive a counterclaim on its own, or the entire defence is a counterclaim, apply to the court on form N244 with the appropriate fee for:
- the defence to be struck out under CPR66.4 on the grounds that the defence is a counterclaim
- summary judgment to be entered for the amount of your claim and interest plus the fees incurred (including the fee for making the application).
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Counterclaim forms only part of the defenceWhere the counterclaim forms only part of the defence, you should deal with the rest of the defence on its merits and write to the defendant pointing out that you will be applying at the hearing for the counterclaim (and defence, if appropriate) to be struck out.
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Challenge that Civil Procedure Rule 66.4 does not include NIC (excluding Class 2)Exceptionally, in a case involving NICs, the court or the defendant may challenge the application of CPR66.4 to NICs. For claims other than Class 2 you should respond according to the class of NIC shown in the following table.
| Class 1, 1A and 1B | Paragraph 16 to Schedule 4 of the Social Security (Contributions) Regulations 2001 provides that |
“The Income Tax Acts and any regulations under section 203 of the Taxes Act (pay as you earn) relating to the recovery of tax (“the relevant provisions”) shall apply to the recovery of
(a) any amount of earnings-related contributions which an employer is liable to pay the collector … or which he is treated as liable to the collector for any income tax period …; or
(b) any amount of Class 1B...
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