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Debt collectors on the chase for HMRC

HM Revenue and Customs has confirmed it will use debt collection agencies over the next year to chase individuals and firms holding £140million of tax debt.

Having looked at using external collection agencies for some time, and following what HMRC called a “successful” pilot, the taxman has now signed up four agents.

It added that, in their task of focusing on lower value debts, each debt collection agency (DCA) will operate under “industry and HMRC standards.”

The statement follows warnings that private collection firms could act in a way that HMRC wouldn’t, or shouldn’t, because HMRC’s code of conduct is just for HMRC.

Sounded by accountants, the concerns were over how a debtor would be treated, including but not limited to the security of their personal details, which will be shared with the agencies.

However before the debt is passed to one of the four DCAs, the Revenue will write to the taxpayer, and provide them with a final opportunity to pay or settle their liability.

Nick Lodge, director of debt management and banking at HMRC, says the agencies offer the department “additional capacity” in tackling those people who refuse to pay what they owe.

“Some businesses and individuals are not in a position to pay what they owe and we have put procedures in place to help those who are genuinely struggling,” he said.

“But those who simply refuse to pay have to be pursued, and our partnership with the debt collection agencies ensures they will be.”