As the UK emerges from the pandemic and economic activity resumes, HMRC are restarting their debt collection work and will be contacting customers who have fallen behind with their tax during this difficult time. They have promised to take an understanding and supportive approach to dealing with those who have tax debts or are concerned about their ability to pay their tax.

HRMC hopes to do anything possible in order to help businesses with temporary cash-flow issues to survive as the economy grows, but where businesses have little chance of recovery, they do have a responsibility to act.

When a customer has a tax debt, they always try to contact them by phone, post or text message so that a discussion about their situation can be had and a way forward can be agreed. HMRC are urging customers to respond to these communications as soon as possible because, unless they can discuss you situation, they cannot tell if you need support or are simply refusing to pay.

Their aim is to work with every customer to find a way for them to pay off their tax debt as quickly as possible, and in an affordable way for them. The support they can offer varies from customer to customer. For instance, they can discuss affordable payment options, such as a payment plan (called Time to Pay), where customers pay what they owe in affordable instalments. Even if customers cannot pay anything straight away, by getting in touch they can understand your circumstances better. Short-term deferral, which means nothing would need to be paid for a set period of time may also be an option, and no further action would be taken to collect the tax debt until that time has lapsed.

More information about payment arrangements (Time to pay) is available at How HMRC supports customers who have a tax debt.

Where customers do not respond, or refuse to pay when they can afford to, HMRC may try to visit them at their home or business address. From September 2021, where customers are unwilling to discuss a payment plan, or where a customer ignores their attempts to contact them, they may start the process of collecting the debt using enforcement powers. These powers include taking control of goods, summary warrants and court action including insolvency proceedings, but these are only used as a last resort.

Should you need any support or guidance, please contact your relationship director today. 

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