Page last updated at 09:40 GMT, Wednesday, 14 January 2009

Businessman in bankruptcy triumph

Edward Fowler
Edward Fowler said he was relieved at the ruling

An ombudsman has ruled that HM Revenue and Customs showed "reckless disregard" for an Aberdeen businessman who claimed he was wrongly declared bankrupt.

BBC Scotland can reveal a Parliamentary Commissioner for Administration report has found in Edward Fowler's favour, and recommends 50,000 in compensation.

Mr Fowler ran into difficulties in 2003 when a computerised accounting system at the recruitment firm he ran, failed.

HMRC said it would examine the commissioner's ruling.

The problem meant Mr Fowler had problems filing his VAT return.

He eventually paid off his tax debt.

HMRC had already begun bankruptcy proceedings - known in Scotland as sequestration - against the company.

'Appalling treatment'

They later admitted errors - but Mr Fowler had no legal recourse to overturn the sequestration order. He began a legal and political fight to clear his name.

Almost six years on, the Parliamentary Commissioner for Administration has published its report on the case - finding in favour of Mr Fowler.

He said he was appalled at the way he had been treated, but was relieved at the findings.

The report said HMRC failed to exercise and effective control over the case whatsoever.

It said rather than take responsibility for its actions, the agency offered an ill-informed defence of its actions.

The commissioner recommended Mr Fowler is paid 50,000 in compensation.

Mr Fowler's case was fought by his MP, Labour's Anne Begg. She said it cannot be allowed to happen again.

HMRC said it does not comment on individual cases but said it would look at the report.

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