Why the taxman is getting more aggressive

HMRC is making far greater use of private debt collectors in a bid to get what it’s owed.

HMRC has cranked up the amount it spends on private debt collectors.

According to analysis of the taxman’s departmental spending by accountants UHY Hacker Young, HMRC spent £26.3 million on private debt collectors last year.

That’s a huge rise on the £6.2 million spent back in 2014, and takes the total spent since 2011 to more than £140 million.

UHY noted the taxman is taking an “increasingly aggressive approach” to reclaiming tax, saying there had been cases where these debt collection firms chased taxpayers for payments which had already been made.

Mark Giddens, head of private client services at UHY, warned it was important for the taxman to “strike the right balance” between the collection of tax and the welfare of taxpayers.

He also made the important point that most taxpayers who owe tax are in this situation because they simply can’t afford to pay.

Giddens says “debt restructuring options” are more effective at getting at least some money back from them than going down the route of “relentless pressure from debt collectors”.

The taxman’s defence

HMRC has defended its use of private debt collection firms, pointing out they boost the organisation’s “capacity” when it comes to reclaiming debts, and emphasising that it doesn’t use private sector bailiffs.

It also pointed out that it has specialist teams dealing with vulnerable people that need extra support, including people who are in debt.

I’ll take the money from your pay packet

This isn’t the first time this year that the taxman has been flagged up for being more aggressive when it comes to money that’s owed.

Just last month, it was noted that HMRC is making greater use of relatively new powers which allow it to take owed money directly from people’s pay packets using attachment of earning orders.

Essentially, the taxman gets the courts to look at your finances, work out what you need to live on, and determine how much it can deduct from your salary in order to collect what you owe, which may include county court judgements or benefit overpayments.

It is also making far greater use of accelerated payment notices, which are issued to people that the taxman believes owe money. These notices demand payment upfront without having to prove the money really is owed through the courts.

Taken together, this paints a pretty unwelcoming picture of the taxman.

Of course, we all need to pay what we owe, and it’s right that HMRC has some powers at hand to nudge people along who are falling behind on their payments.

But we need a HMRC that people can approach honestly if they are struggling, and which will give people the time and space they need in order to pay what they owe.

Being pursued for money you don’t have, not only by the taxman itself, but by debt collectors acting on its behalf, has the potential to do far more harm than good.

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A spate of tax scams

The timing of HMRC adopting this more aggressive approach is particularly concerning, given the spate of recent stories about vulnerable people being scammed out of thousands by people posing as the taxman.

I’ve had the calls myself, with automated messages claiming that I owe HMRC thousands and to call a certain number back as soon as possible.

People that do so are told that if they don’t hand over huge sums, bailiffs will be on their way to the property to take anything of value.

Obviously, the fact that these people are willing to accept payments in the form of iTunes vouchers is a pretty clear warning sign that this is just a scam to many of us.

But equally there are evidently significant numbers who may not realise this, or who are panicked into doing something daft because of the fear that the taxman generates.

This fear is only likely to increase if the taxman is becoming more forceful when it comes to collecting tax debts.