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.
Why HMRC Uses Debt Collection Agencies
You may have heard the press reporting on the HMRC “tax gap”. This is the difference between the amount of tax payments HMRC expects to receive in a tax year, and the amount it actually does. In its 2015 report, HMRC estimated that the annual “tax gap” for the 2013/14 tax year was £34 billion. Of this amount £16.5 billion was attributed to unpaid taxes from small-to-medium enterprises. Reducing this tax gap is one of HMRC’s main priorities and it has sought to do this in a number of ways, one of which has been the use of third party debt collection agencies.
Since 2009, HMRC has been enlisting a rota of debt collection agencies to help it recover unpaid taxes. While the practice of HMRC using debt collection agencies has been somewhat controversial, there’s no sign that this will cease in the near future. HMRC generally uses these debt collection agencies as a last resort, but this is not always the case.
Having Problems With Company Debts To HMRC?
If your company owes HMRC outstanding tax payments, we would always advocate that you get in contact with them as early as possible to discuss potential arrangements such as Time to Pay that will stop the issue escalating further.
If you don’t engage with HMRC, they will take steps to recover the debt such as seizing goods or, if the company owes more than £750, petitioning to have it wound up. For these reasons, it’s always better to engage with them as soon as you can or speak to us about contacting them on your behalf.
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 08000 746 757 or use the live chat in the lower right hand corner.