HMRC Ramps Up Use of Debt Collectors

01 May 2012

Government departments are increasingly using debt collection agencies to recover outstanding tax and VAT bills, as well as tackling benefit cheats, due to the cost to public services of fraud and error, £31 billion a year. HMRC alone reports £6 billion of losses a year due to tax errors.

The latest figures on the volume of consumer debt being chased by debt collection agencies hit £58bn in 2011, according to a report by the Credit Services Association (CSA), the representative body for the UKdebt collection industry.

HMRC has saved £50m by introducing an application screening process for tax credit claims and is developing a new system, Connect, to identify tax fraud and non-compliance. It has also expanded its tax investigation activities, ramping up the number of annual prosecutions to 1,000 a year.