HMRC have opened a Call for Evidence, 'Modernising Tax Debt Collection from Non-Paying Businesses'.  The paper is seeking views on how HMRC can adapt its approach to debt collection.


The Call for Evidence focusses on two areas where changes in business practices have caused HMRC’s existing debt collection procedures to be less effective.

Changing nature of the economy

HMRC state that their debt collecting powers are becoming outdated as the growth of e-commerce makes it easier to conduct business in the UK without a presence or physical assets.

HMRC are seeking views on the extent to which companies use various methods which could prevent tax debts being collected and how procedures could be changed to mitigate those risks.  

The methods that HMRC are focussing on are:

  • UK businesses which hold minimal UK assets.
  • Leasing assets from connected parties.
  • Intangible assets.
  • Digital wallets.

Businesses deliberately failing to pay

HMRC are also seeking views on how changes to their procedures could help collect tax debts from the minority of taxpayers who fail to pay their liabilities and engage with HMRC.  Their goal is to prevent costly and time consuming enforcement action by seeking views on:

  • The mindset of defaulting taxpayers and whether additional steps should be taken by HMRC.
  • Whether expanding security deposits to taxpayers who were intentionally non-payers would change behaviour.
  • Whether director personal guarantees could be used to incentivise payment of tax debt.
  • What opportunities are there to further engage agents and intermediaries in the debt collection process.

Useful guides on this topic

Time to Pay agreement
Business and self-employed taxpayers with outstanding tax liabilities, may be eligible to receive support with their tax affairs through HMRC’s Time To Pay service.

Direct recovery of Debts (enforcement by deduction from accounts)
When can HMRC recover debts directly from persistent non-payers?

External Links

Modernising Tax Debt Collection from Non-Paying Businesses

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