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May 2019

HMRC quadruples spending on private debt collectors

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Autopsy of a Newspaper headline At the end of last month the main heading of this article was the heading to a piece in the pages of an internationally renowned daily UK newspaper- the one that does not quite fit the riddle “what is black and white and red all over?”-more pink if you get my meaning. The findings, by a well-regarded firm of accountants, seem to have been covered by all the leading papers utilising headlines in much the same vein. As someone who, in his working life, has almost daily contact with HMRC, this headline rather surprised me, as in my experience, I have almost never seen evidence of private debt collectors [“PDCs”] in matters of tax. I suspect that this is because our practice is one that predominately deals with companies in financial difficulties rather than individuals with debt issues. Yes, we do very occasionally come across bailiffs acting on behalf of HMRC but these are court appointed bailiffs rather than private bailiffs. There are 10 PCBs utilised by HMRC and their names are provided on the Government’s own website: https://www.gov.uk/if-you-dont-pay-your-tax-bill/debt-collection-agencies Let’s deal with the headline first. Accordingly to the article, the money spent by HMRC on PDCs had quadrupled in the past five years suggesting an increasingly “aggressive” approach to collecting unpaid tax. In 2018, HMRC spent £26.3m on PDCs up from the figure of £6.2m in 2014. What the article did not say is that spending year-on-year was in fact down to 67% of the 2017 expenditure level [£39.1m]. My further research revealed the following expenditure on PDCs by HMRC: Year £m 2018 26.3 2017 39.1 2016 24.1 2015 12.5 2014 6.2 2013 14.8 The aforementioned figures did allow another national daily [the one with all the spelling mistakes] in May of last year to say that “HMRC spending on debt collectors up by more than 500% in three years”. The paper went on to say that the taxman had little day-to-day control over the firms in question [I would suggest that HMRC had no day-to-day control-why have a dog and bark yourself?] and that...
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