The taxman is farming out part of its debt collection operations to four companies in moves to rake in an extra £140m of tax debt.
HMRC has signed contracts with Commercial Collection Services Ltd, Credit Solutions Ltd, Fairfax Solicitors Ltd, iQor Recovery Services Ltd to boost HMRC’s debt collection capacity and help the pursuit of lower value debts.
Following a successful pilot,HMRC announced in the Emergency Budget that it was planning to use Debt Collection Agencies.
Safeguards have been put in place to ensure the companies operate under industry and HMRC standards.
Nick Lodge, HMRC Director, Debt Management and Banking, said:
“We do understand that some businesses and individuals are not in a position to pay what they owe and we have put procedures in place to help those who are genuinely struggling.
But those who simply refuse to pay have to be pursued, and our partnership with DCAs ensures they will be.”
Before the debt is referred to a DCA, HMRC will write to the debtor giving one final opportunity to pay or reach an agreement, the taxman added.
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