'The amount HMRC pays to private-sector debt collectors has risen by more than 500% in three years, suggesting it may be stepping up the pressure on people who cannot pay their tax bills.
The figure rose to £39.1m in 2017, which was 62% higher than the £24.1m that HMRC spent on these services in 2016, according to the accountancy firm UHY Hacker Young, which obtained the data. The figure has increased annually for several years: it stood at £6.2m in 2014, then rose to £12.5m in 2015.
Using a private debt collection agency is one of several ways HMRC chases outstanding taxes – it has a relationship with 12 different agencies that can pursue debtors on its behalf – and its strategy may be working: in October 2017, HMRC declared that unpaid tax was at a “record low” as a result of a crackdown on avoidance, evasion and noncompliance.
However, the department has also come under fire for using debt collectors to pursue people whose tax credits were overpaid.
UHY Hacker Young said the sharp rise in spending on private-sector debt collectors “could suggest HMRC may be stepping up the pressure on people who can’t pay their tax bills as it continues its dash for cash”.
It added that the taxman had little day-to-day control over these firms, whose attitude towards debt collecting “could be seen as more aggressive than that of HMRC”.'
Read more: HMRC spending on debt collectors up by more than 500% in three years
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