Are PCN debts allowable debts in Breathing Space?
Breathing Space and Penalty Charge Notices (PCNs)
We've seen there's been questions around Penalty Charge Notices and the validity of these 'debtors' applying for Breathing Space. To explain this clearly, we have included a break down of the regulations below for you:
Moratorium debt
Reg 6. A “moratorium debt” is any qualifying debt –
a) that was incurred by a debtor in relation to whom a moratorium is in place;
b) that was owed by the debtor at the point at which the application for the moratorium was made; and
c) about which information has been provided to the Secretary of State by a debt advice provider under these Regulations.
Reg 5. – (1) A “qualifying debt” means any debt or liability other than a non-eligible debt.
Reg 5 (4) In these Regulations “non-eligible debt” means –
d) Any liability in respect of a fine imposed by a court or from any liability under a recognisance except, in the case of a penalty imposed for an offence under an enactment relating to the public revenue or of a recognisance, with the consent of the Treasury.
Page 6 & 7 – Debt Respite Scheme (Breathing Space) guidance for creditors provides further clarification on the above.
2.7 Excluded Debts
All personal debts and liabilities are qualifying debts, except for:
Liabilities to pay fines imposed by a court for an offence. This includes any interest on the fine and any penalties connected to it. This does not include penalty charge notices, e.g. a parking ticket.
Therefore, if the PCN has been issued before the date of the moratorium, regardless of the stage it is at, it must be included in the moratorium if you have received a notification of the breathing space.
Learn more about Breathing Space
We are currently offering free virtual training on Breathing Space being led by our Client Partnership Manager and Revenues expert, Julie Smethurst IRRV (Hons). To book your place click here.
