Government Declares Man Bankrupt Over Less Than $2 Owed

Former cab driver Matt Matharu's life was looking good, he was now making a good living as the director of a graphic design company in the UK.

Then a letter came that that led to him losing his job, risking having his house repossessed and unable even to pay for his basic needs.

Not only did the Tax Revenue service claim he owed �12,000 in tax, but a court date had been set to declare him bankrupt.

But it was only when the family were deep in debt that the Revenue service admitted it had made a mistake and said Matharu owed a mere 88p tax for the year 2003/04 and was actually owed rebates of �370 from three other tax years.

"The Inland Revenue bankrupted me for just 88p," Matharu says. "My life was turned upside down and my family almost ended up homeless because of their total and utter incompetence."

When the tax letter arrived, he and his wife believed the "misunderstanding" would be swiftly sorted out. They sent off files of documents to prove his case. Yet the message failed to register.

Two months later he was declared bankrupt by a High Court judge in London. He had not even attended the hearing, having been told it would be adjourned as a matter of routine to give him time to challenge the order.

In the weeks that followed, the couple's joint bank account was frozen, their mortgage company took out a possession order on their house and Matharu was forced to quit his job because those bankrupt cannot be company directors.

"You just keep hoping and hoping that someone is going to listen, look at the paperwork you've supplied them, press a button on a computer," he says in an ITV interview. "It's the age of the computer, you know Big Brother knows everything about us, so why doesn't he know about my tax affairs?"

But even now that things are sorted out, the family's problems are far from over. The family is now �15,000 in debt because of the tax blunder.

Matharu has had to return to driving a cab after losing the business, and knowing his house could be repossessed at any time if he fails to keep up with any payments.

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