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HMRC has recently released a policy paper highlighting their latest approach on how they will resume collecting debts. HMRC debt collection activities were paused whilst the country was in the grips of the COVID pandemic. On 30th June, HMRC published the policy paper to announce they will be resuming activities as the UK emerges from the pandemic.

One of the Government’s key priorities during the COVID pandemic was to protect livelihoods and keep people in work. HMRC has been an integral part of this, by delivering support packages such as the Coronavirus Job Retention Scheme and Self Employment Income Support Scheme.

HMRC Debt Collection Policy Paper

Within the paper, HMRC acknowledges that businesses and individuals have been impacted by COVID-19. As a result, many people face uncertain financial circumstances in these uncertain times. HMRC recognises many of their customers will be extremely worried as the financial support schemes being to come to a conclusion. They confirm that they will be restarting debt collection work and will be contacting customers who have been unable to pay taxes during the pandemic.

HMRC justify the resumption of debt collection to help bring in money to support public service funds such as the NHS and schools. The policy paper claims these funds will be essential to support economic recovery and growth.

HMRC Key Message

HMRC confirm they will take an understanding and supportive approach to collect tax debts. They claim their message is simple – ‘If you can pay your taxes then you should do so – but if you’re struggling, we want to work with you to agree on a plan based on your financial position.’  HMRC claim they will do everything they can to help businesses with cash-flow issues to survive, but if a business has little chance of recovery, they have a responsibility to act.

Next Steps

HMRC will contact people who have a tax debt by phone, post or text message with the aim of agreeing to a way forward. People can check if the contact is genuine by accessing HMRC support pages. They encourage people to respond to communications as soon as possible. Even if people can’t pay straight away, there may be the option of a short-term deferral. This will help take the pressure of repaying the debt away for a short while. There are a number of support options available, including Time to Pay arrangements and government-backed lending support loans to help repay the debts.

If people refuse to respond to communications or refuse to pay, HMRC warns they may visit people at their home or business address. From September 2021, HMRC will begin using enforcement powers to collect a debt, if people are ignoring all contact or are unwilling to discuss a payment plan. You can view HMRC’s guidance on how they treat customers who have a tax debt here.

If HMRC contact you, it is important you respond to them, even if you are struggling to make repayments. If you would like advice on your tax affairs please contact us. Call us on 0800 471 4546 or you can contact us here.