It has emerged that HMRC is planning to employ debt collectors to chase late payers, an idea that has been branded as ‘dangerous’ by accountants. Certain people will be receiving letters over the next week from HMRC informing them that their details will be passed to a debt collection agency unless their bill is settled.

The debt collectors will be permitted to telephone and write to debtors but they will not be allowed to visit their homes or undertake any litigation. A spokesman for this proposal stated, “We have identified a number of potential debt packages to trial. These cover a range of types of tax, sizes and ages of debt, and include both individual and business debtors.”

Concerns have been raised about HMRC’s use of outsourcing to debt collection agencies. CreditAction, the debt charity commented, “We would urge HMRC and anybody thinking of using these organisations to make sure there is proper oversight of the system.”

HMRC have defended this scheme as an attempt to boost taxpayer returns. They stated, “We retain a flexible approach [over] debts to ensure we get the best result for the taxpayer. Using private sector capacity has the potential to complement this approach and that is what we are now exploring”.

Further concerns centre around the security of sensitive information, as taxpayers’ details will be passed to the collection agencies. HMRC said that only limited information would be handed over and that customer security would be “paramount”.

These steps have been taken as HMRC is struggling to secure monies owed due to the economic downturn. Angela Beech, a tax partner from accountancy firm Blick Rothenberg, said, “HMRC is growing increasingly desperate to collect tax, which can often be a long process. They no doubt hope that using a specialised agency focusing on late payments will help them to collect more tax more quickly.”

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