Yesterday, we wrote about the UK tax-burden according to a recent report by UHY Hacker Young.
The same company has revealed that HMRC spent £6.8m on external debt collectors in 2014, compared to £14.8m in 2013.
This reduction is down by half, and is likely to have happened after the public backlash about the way in which debts were being persued.
The use of external debt collection agencies began in 2009 as HMRC were under pressure to get the most out of its tax take and reached a high in 2013.
Head of private client services at UHY Hacker Young, Mark Giddens, said;
“Debt collection agencies are rarely the most appropriate way for HMRC to collect unpaid taxes.
“HMRC need to be absolutely certain that they are correct when employing these sort of tactics. There is no guarantee that HMRC’s databases are exactly up to date. The danger is that if errors are made then taxpayers are left out of pocket and fighting for their own money against a government agency.”
HMRC can now also, rather controversially, taken on the power to demand that any disputed tax is paid up front. They are also looking at the possibility of taking unpaid taxes directly from people’s bank accounts.
What do you think of this whole affair? Is HMRC always right? What about genuine disputes and mistakes?
If you would like to talk with us about your business cash-flow then request a free of charge call back from this website; we are here to help advise and guide when it comes to all money matters for your company.