As we all know, HMRC is the UK government agency responsible for collecting taxes. Every year, HMRC collects billions of pounds in taxes from individuals and businesses. However, not all taxpayers pay their taxes on time ...
If you are struggling to pay your taxes, it is always best to reach out to HMRC and discuss potential payment plans!
Whether it is deliberate or simply an oversight, non-payment of taxes can result in significant losses for the Treasury. To recover these unpaid taxes, HMRC often turns to debt collection agencies.
"Debt collection agencies are private companies that specialise in collecting unpaid debts on behalf of their clients!"
HMRC partners with these agencies to track down and collect unpaid taxes from both businesses and individuals. This partnership allows HMRC to focus on its core responsibilities while the debt collection agencies handle the task of recovering unpaid taxes.
So, how does HMRC utilise debt collection agencies? When taxes aren't paid on time, HMRC will first send them a reminder letter. If the taxpayer still does not pay, HMRC may issue a formal demand for payment.
If these notices are still ignored, HMRC will pass the case to a debt collection agency. The agency will then contact the taxpayer and attempt to collect the unpaid taxes on behalf of HMRC.
"Debt collection agencies have various tools at their disposal to collect unpaid taxes!"
They can issue court orders, seize assets, or even take legal action against the taxpayer. These actions can have severe consequences for the taxpayer, including damage to their credit score and potential bankruptcy. Therefore, it is crucial for taxpayers to pay their taxes on time to avoid such consequences.
It is worth noting that HMRC only uses debt collection agencies as a last resort. The agency will always try to work with taxpayers to find a suitable payment plan before involving a debt collection agency. Additionally, HMRC has strict guidelines that debt collection agencies must follow, to ensure fair treatment of taxpayers.
For taxpayers, the involvement of debt collection agencies can be a stressful and overwhelming experience. However, it is essential to understand that HMRC's partnership with these agencies is a necessary step in collecting unpaid taxes.
"It also serves as a reminder for taxpayers to fulfil their tax obligations on time!"
HMRC's partnership with debt collection agencies has been successful in recovering unpaid taxes. In the 2019-2020 tax year, HMRC collected over £34 billion through debt collection agencies.
If you are struggling to pay your taxes, it is always best to reach out to HMRC and discuss potential payment plans.
Until next time ...
ROGER EDDOWES Business Godparent
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about HMRC and their use of debt collection agencies (or you're struggling to pay your taxes and need advice), it may be a great idea to call me on 01908 774320 and let's see how I can help.
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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