Nil-debt businesses receive threatening HMRC letters

THE TAXMAN HAS been sending out threatening letters to businesses that owe no money, Accountancy Age can reveal.

The letters inform businesses that their “outstanding tax debts” have been transferred to the HMRC’s Distraint Department “to list your goods so that they may be sold at a public auction”. The businesses are advised to call a telephone line or pay the full outstanding amount immediately.

Accountants have highlighted that these letters are being sent to clients that owe nothing.

Paul Aplin, partner at A C Mole & Sons said that his clients have begun receiving these types of letters in the past few months.

He commented: “The thing that is missing from the letter is the amount of the debt that has prompted HMRC to consider such serious action. The figure is, in fact, nil.”

An HMRC spokesman said that these are automatically generated letters and are sent out when there has not been a nil-payment submission. The letters were being sent out because HMRC was becoming more efficient in chasing debts, he added.

Aplin remarked: “They have a point in so far as you have got an obligation to tell them there is nothing owing.

“My problem with that letter is that it is very heavy-handed. How can you send out a letter saying we are sending people out to mark goods for auction if you do not know the debt you are going to collect is?”

Receiving a letter like that could be a “pretty distressing experience”, he said. “I’m quite happy for a letter to say ‘if you do not put in a nil return, we can assume you owe tax and then this kind of action could follow’. But to go straight to ‘this has been passed to’ and ‘it will be dealt with straight away’ is disproportionate.”

Ellen Green, an independent accountant, said that several of her clients had received letters despite not owing anything.

When she called the helpline, she was told by call centre staff that there was a lack of morale in the front office as a result of the problems the letters are causing. She was also told that contact names on the letter were made up.

“It comes out of the blue. There is no way of dealing with this. You cannot pay it because there is no liability and when you call, it usually doesn’t answer,” she added.

The Daily Mail last month reported that individuals are receiving threatening letters from HMRC about outstanding payments, despite having arranged to pay debts off.

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