Thursday 29 May 2014

HMRC Increases Its Spend On Bailiffs


UHY Hacker Young reports that HMRC has doubled its use of private sector bailiffs and debt collection agencies over the last two years, indicating that it is taking a more aggressive approach to recover overdue tax.

UHY Hacker Young says that HMRC spent £14.8M in 2013 on the use of private sector debt collectors, this is an increase of 15% from £12.9M in 2012 and more than double the £6M spent in 2011.

Mark Giddens, Head of Private Client Services at UHY Hacker Young, is quoted by Director of Finance:
Bailiffs do not have the best of reputations and many taxpayers are going to be very alarmed when a debt collector is brought in.
 
Most taxpayers who are behind with their payments are in that situation because they simply can’t afford to pay their tax – not because they intend to string HMRC along.”
The risk of bailiffs being used is increasing as HMRC winds down its "Time to Pay" scheme.

Mr Giddens also notes:
There is the danger of mistakes in communication between HMRC and its agencies, with taxpayers being incorrectly chased for debts. Any errors that do arise would be far easier to rectify if the process was kept in-house.”
HMRC uses 13 companies to aid it in its debt recovery programme.

However, the "success" or otherwise of farming out debt collection to the private sector depends very much on the quality of the private sector firm used and the validity of the information they are given to work with.

It is also worthwhile remembering that once you have unleashed the hounds, it is sometimes rather difficult to rein them back in. Do not forget that if HMRC are given powers to raid bank accounts, this may well exacerbate the problems faced by taxpayers incorrectly targetted as a result of erroneous HMRC data.

Please feel free to share your experiences of HMRC's debt collection tactics.


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1 comment:

  1. Ken,

    I must correct you on a couple of points :

    1) Its true HMRC are using more D(ebt) C(ollection) A(gencies) or DCA`s to try and collect the money, all the DCA can do is ring or write they have absolutely ZERO power to take enforcement action to obtain payment.

    2) HMRC have recently set up a new Task Force dedicated to collecting unpaid debts that where previously returned by the DCA`s as uncollectible.

    3) HMRC do not employ private bailiffs, all bailiffs are employees of HMRC

    4) Time To Pay arrangements are still being granted, maybe not in the numbers agreed previously, but they are still being granted.

    ReplyDelete