Written by: Keith Tully
Published: 29th April 2019
HMRC has significantly increased the scale of money it pays to private debt collectors in pursuit of unpaid taxes over the past several years.
That’s according to the findings of research looking into the allocation of HMRC funds by the accountancy firm UHY Hacker Young.
The figures suggest that HMRC spent as much as £26.3 million on hiring the services of private debt collectors over the course of 2018.
That number represents more than a fourfold increase on the £6.2 million spent by the Revenue on those same services over the course of 2014.
In total, HMRC is understood to have shelled out in the region of £140 million on hiring private debt collectors since 2011, with the data behind those numbers being taken from the organisation’s own records of departmental spending.
The Revenue has been allowed to pay for private debt collector services for the past 10 years but UHY Hacker Young says that the data on outlays during 2009 and 2010 is incomplete.
The accountancy firm takes the view that HMRC has been ramping up its efforts to proactively pursue unpaid tax amounts in recent years under pressure from the Treasury.
That pressure is believed to have encouraged representatives of HMRC to adopt an “increasingly aggressive approach” to their pursuit of unpaid taxes.
Mark Giddens, head of private client services at UHY Hacker Young, says that HMRC should only use third party private debt collectors as a “last resort”.
“The majority of taxpayers who owe tax are in that situation because they simply can’t afford to pay,” Mr Giddens says.
“Workable debt restructuring options are more effective than relentless pressure from debt collectors,” he added.
Speaking in response to the release of the latest data on the subject, a spokesperson for HMRC said: “We sometimes use debt collection agencies (DCAs) to add to our capacity reclaiming debt, but we do not use private sector bailiffs.
“Our advice to anyone struggling with debt to get in touch so we can help them. HMRC is committed to providing extra support for vulnerable customers, including debtors.”
5th August 2020
The British Chambers of Commerce (BCC) has called on the chancellor of the exchequer Rishi Sunak to change his approach to providing support to businesses across the UK economy.Read More
5th August 2020
A growing number of companies have been announcing their intention to make significant cuts to their workforces as the coronavirus crisis continues and the UK economy struggles to rebound.Read More