HMRC doubles spend on private sector debt collection

| Author: Darren Shelmerdine [Member (F/1004)] | Filed under: General News
HMRC doubles spend on private sector debt collection

The taxman has almost doubled how much it pays to private sector debt collectors to chase those who fall behind on their taxes.

HM Revenue & Customs (HMRC) shelled out £24m for these services in 2016, up 92 per cent compared with £12.5m in 2015 and up 300 per cent compared with £6m in 2014, according to figures from UHY Hacker Young.

The accountancy firm noted that, while the practice was a cost-effective way of chasing outstanding taxes, some critics have slammed it as heavy-handed and aggressive, and potentially unfair when the person simply cannot repay the amount and is not merely ignoring the taxman's calls.

"HMRC is under pressure to constantly drive up tax take and collect as much as possible, but it does need to be careful to ensure that the taxpayer does not suffer as a result of efforts to do this," said Mark Giddens, head of private client tax at UHY Hacker Young.

"Too many debt collection cases relate to HMRC errors or concern vulnerable individuals. The use of third party agencies makes it that much more difficult to resolve issues and protect those who are simply unable to manage their tax affairs."

A HMRC spokesperson said: "We use debt collection agencies operating under strict codes of conduct to pursue debt, and we expect them to uphold those codes at all times."

Source: City AM

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