HMRC accused of aggressive Debt Collection practices

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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.

 
 
 
 
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