HMRC to resume debt collection enforcement work

Date posted: 21st Jul 2021

Following an almost 18 month period during which it has taken limited action to collect overdue tax payments, HMRC has announced that it is restarting its debt collection work. Those businesses and individuals who have fallen behind with their tax will be contacted over the coming months via phone, post or text message.

Despite the resumption of debt collection work, HMRC state that they will continue to liaise with taxpayers to agree a fair resolution to outstanding debt. This will include the ongoing acceptance of reasonable time to pay arrangement proposals, which could spread a debt over a period of months. Short term deferral arrangements will also be used to allow time to accrue funds to settle debts and HMRC will not take any further recovery action during an agreed deferral period.

However, those who do not respond to HMRC or who are deemed to be not willing to pay amounts that are considered affordable will now face stricter action. This could include visits to individual’s homes or businesses. From September 2021 onwards, those who still fail to engage after this stage will face formal debt collection activity which could include HMRC seizing goods, issuing warrants and court action, including insolvency proceedings.

Individuals who are struggling to cope with personal debt of all kinds, including HMRC arrears, can seek help under the Debt Respite Scheme. This scheme allows for a 60 day breathing space during which creditors will have to pause enforcement action and freeze interest and charges, allowing individuals time to take advice and restructure their finances to allow them to meet their payment obligations. Comparable provisions are also available to businesses under the moratorium provisions of insolvency regulations.

Remember, not all correspondence you receive from HMRC is copied to us as your tax agent. Please therefore forward on any emails or letters and relay any telephone calls to us so that we can provide you with accurate and timely advice. Also, please be aware that criminals continue to issue fraudulent correspondence which purports to be from HMRC. Never give out any personal details or make any payment unless you are 100% certain of the legitimacy of the other party. HMRC provides guidance on how to spot scam correspondence online.

If you are concerned about HMRC debt, or should you wish to discuss any aspect of your tax affairs, please get in touch with our tax team.

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