Over a year ago I wrote the following:
"HMRC debt collection agents out in the field are now forbidden from contacting HMRC offices to validate the debts that they are being asked to collect.
It seems that the support teams back at base do not have the time to take phone calls.
That at least is the official explanation given to the field farce. However, it is widely suspected that the real reason is that HMRC is preparing the ground for this work to be given to private debt collection agencies. These private agencies, quite correctly, will not be able to phone up HMRC offices and ask for details from confidential records.
FYI, the budget announced that another £500M of debt would be handed over to private debt collection agencies to chase.
Well it seems that a pilot scheme went very well for the debt collection agencies.
The agencies were given a tranche of work to do, and a control tranche was left with HMRC teams (but was left completely untouched).
Can you guess what happened?
Yes, that's right, the debt collection agencies won!
Anyhoo, why does it matter if field farce teams (or for that matter private debt collectors) cannot contact HMRC support offices?
Surely a debt is a debt, which should be collected, and that is the end of the matter?
Not quite, for I am also given to understand that the field farce estimate that a large percentage (maybe up to 60%) of the debts they are given to chase up are in fact incorrect.
The field farce have been told that, if challenged by a "customer" (taxpayer to you and I), the onus is on the "customer" to prove that HMRC are wrong.
Guilty until proven innocent is the motto!
How can there be such a large percentage error in debts being chased up?
Due to delays in processing returns, field farce are regularly chasing estimated debts which have been, or should have been, displaced by returns submitted. The returns have either gone down the online black hole, again a regular occurrence, or are sitting in an office somewhere waiting to be dealt with.
Additionally, when they are chasing current PAYE, their cases are sometimes prepared up to 3 weeks in advance.
Most have been paid by the time they get to them.
I won't say what I was told about the validity of New Tax Credit debts!
Things will only get worse!
Well, "good news"!
Accountancy Age reports that 10 debt collection agencies have been appointed by HMRC to collect up to £1BN in taxes owed.
The contracts are worth £70M.
The successful companies this time around included Advantis Credit, Apex Credit, Close Credit Management, Clanchatton, Hillesden, Fredrickson International and Rossendales.
Commercial Collection Services, Fairfax Solicitors and iQor Recovery Services have been retained from the pilot scheme in 2010-11. However, Credit Solutions, will not be appointed by HMRC, despite collecting debts in 2010-11.
Tax does have to be taxing.
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