HMRC slashes use of private debt collection agencies
HM Revenue and Customs (HMRC) has halved its use of external debt collection agencies during the last 12 months, after recent criticism from the public when previously chasing outstanding tax bills.
Almost £7m (£6.8m) was spent on private debt collection agencies in 2014 compared with £14.8m in 2013, according to UHY Hacker Young.
The tax authority first used external debt collectors back in 2009 following pressure to maximise its tax haul.
Mark Giddens, head of private client services, UHY Hacker Young, said: “Debt collection agencies are rarely the most appropriate way for HMRC to collect unpaid taxes.
“HMRC need to be absolutely certain that they are correct when employing these sort of tactics.”
Tax experts have previously suggested that breakdowns in communication between HMRC and its external debt collectors can sometimes lead to taxpayers being wrongly pursued on the basis of incorrect or out-of-date data.
“There is no guarantee that HMRC’s databases are exactly up to date. The danger is that if errors are made then taxpayers are left out of pocket and fighting for their own money against a government agency,” added Giddens.
HMRC has already been given powers to demand that disputed tax be paid up front and the authority is also pushing for the ability to recoup unpaid tax directly from taxpayers’ bank accounts.
With HMRC no longer requiring a reason to open an enquiry into a business or personal tax affairs, potentially everyone is at risk of a tax investigation.
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Last updated: 14th May 2015