HMRC accused of aggressive Debt Collection practices


HM Revenue and Customs is adopting increasingly aggressive Debt Collection strategies in respect of firms overdue on VAT payments, experts warn.

Figures show that firms owe £2.5billion in overdue VAT for 2012-13, with many struggling to find the cash or access bank finance to pay on time.

Yet this is down from the £2.7billion owed in 2011-12 – evidence, says finance provider Syscap, that the Revenue is adopting more aggressive debt collection tactics.

Last year the Revenue almost doubled its use of distraint, a right to seize business assets, seizing assets 4,746 times. It doubled the sum spent on external debt collectors to almost £13million.

Syscap boss Philip White said: ‘To companies under financial pressure, accessing the funds to pay a big tax bill, if they have not even received payment from customers and clients yet, can be a huge challenge.’

The Revenue is under pressure to raise revenue from VAT. VAT avoidance contributes £9.6billion to the UK’s estimated tax gap of £32billion.