Over recent years, HMRC have become more aggressive about the methods they use to recover unpaid debts and it may be that as a company having HMRC tax problems, you have been on the receiving end of these methods. These include the use of third part debt collection agencies who have the powers to contact you via letter, phone and SMS.
Generally speaking, if you have reached the stage where HMRC are threatening debt recovery, your business is probably in significant financial difficulties and may be insolvent. It’s almost always better to get good advice and possibly even voluntarily cease trading and liquidate your company if you can’t pay your creditors. The other options are almost always worse and may even lead to personal liability for company directors.
Why HMRC Uses Debt Collection Agencies
Since 2009, HMRC has been enlisting a rota of debt collection agencies to help it recover unpaid taxes. While the practice, has been somewhat controversial, there’s no sign that this will cease in the near future.
All third-party agencies authorised are are regulated by the Financial Conduct Authority and must follow HMRC processes and guidance at all times.
In particular, they are forbidden from visiting you at your home or place of work.
The agencies have the simple remit of collecting what is owed, or referring the matter back to HMRC.
Which Debt Collection Agencies do HMRC Use?
HMRC use the following debt collection agencies:
- 1st Locate (trading as LCS)
- Advantis Credit Ltd
- Akinika Debt Recovery Ltd
- Apex Credit Management Ltd
- Bluestone Credit Management Ltd
- CCS Collect (also known as Commercial Collection Services Ltd)
- Drydensfairfax Solicitors
- Fidélité Credit Management
- Fredrickson International Ltd
- Past Due Credit Solutions (PDCS)
- Rossendales Ltd
- Walker Love
Once the debt has been passed to a collection agency, HMRC advise that you should pay the agency directly rather than them. You should check details provided by the debt collection agency, such as the amount owed and contact HMRC if there is any dispute about these.
If you can show that the company cannot afford to pay the outstanding debt, the collection agencies may accept a plan to make payments via instalments but they can be very aggressive and it may be that you want help discussing this with them.
If you have received a letter from one of the debt collection agencies above acting from HMRC, contact us for a no obligation discussion of your situation. We know that the process can be very unpleasant and are always happy to help. Call us on 0800 074 6757 or use the live chat in the lower right hand corner.