The taxman has more than trebled his use of external debt collection agencies since he took them on, and now spends twice as much on such bailiffs as he did two years ago.
Evidencing what it called HM Revenue & Customs’ “more aggressive action” towards tax debtors, an adviser said HMRC currently has 13 bailiff firms on its payroll, up from the initial four.
The tax authority’s spending on them reflects the increase, having risen from £6million in 2011 (two years after they began chasing overdue tax for HMRC) to £14.8million in 2013.
Pointing to the figures, UHY Hacker Young said the Revenue has clearly recognised that a debt collector on the doorstep gets a quicker response from taxpayers than its own letters.
But the advisory is concerned. The winding up of ‘Time to Pay’ gives fewer ways to repay tax, so the knock on the door may come sooner than when the scheme was widely granted. And then there’s the bailiffs themselves.
“Bailiffs do not have the best of reputations and many taxpayers are going to be very alarmed when a debt collector” arrives, said UHY’s head of private client services Mark Giddens.
“Most taxpayers who are behind with their payments are in that situation because they simply can’t afford to pay their tax – not because they intend to string HMRC along.”
He added that any mistakes in HMRC’s communications with its agencies, which could lead to taxpayers being wrongly chased, would be easier to resolve if the process was in-house.
But 'the fact that the Revenue is spending record amounts on debt collectors shows just how determined the department is to get the money it thinks is owed.'
The adviser added: "HMRC’s hard-line approach looks set to continue, especially if the proposed changes to allow it to access bank accounts to reclaim money come into effect."