Tax authority ramps up spending on debt collection agencies

In the past five years, HM Revenue & Customs (HMRC) has quadrupled the amount of money spent on private debt collectors.

In an increasingly “aggressive” stance to collecting unpaid debt, the Revenue spent £26.3 million on private debt collection services in 2018, up from £6.2 million in 2014. Since 2011, HMRC has spent more than £140 million on these outsourced services.

While the tax authority had originally intended to use the private collection agencies for wealthier individuals, it has come under pressure in recent years to maximise tax revenues and therefore added lower income individuals to their target list.

Confirming that it doesn’t not use private sector bailiffs, a spokesperson for the Revenue says: “HMRC is committed to providing extra support for vulnerable customers, including debtors. We have specialist teams dealing with vulnerable customers who need extra support because they have difficulty resolving their enquiries through the standard HMRC contact channels. This includes a specialist team dealing with those vulnerable customers in debt.”

If you are concerned about a tax enquiry into your affairs, worried that you may have possibly under declared or, worse still, you are already under enquiry, our Beavis Morgan tax specialists, some of whom are former HMRC Inspector of Taxes, are well versed in dealing with all types of tax issues. We are also readily available to oversee HMRC disputes on your behalf, as well as to represent clients in appeal proceedings before the Tax Tribunal. In some situations, we can also offer professional fee protection insurance, so the costs are covered in whole or in part.

For more information and to discuss your tax affairs in further detail, contact your usual Beavis Morgan Partner.