25 Aug, 2021 08:40 AM
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Post-COVID Tax Debts Collection

Collecting Tax Debts As We Recover From Coronavirus (COVID-19).

As it has been throughout the pandemic, the government’s goal is to protect livelihoods and keep people employed. HMRC has played a key role in achieving this, for example, by halting numerous debt collection activities and implementing support programs such as the Coronavirus Job Retention Scheme and the Self Employment Income Support Scheme.

It's great that HMRC continues to say that they "understand that many clients are concerned as the financial assistance programs begin to wind down" and that they "intend to give practice help wherever they can," echoing their prior messages.”.

However, whilst HMRC’s tax collection activities were paused and staff redeployed in order to deliver support schemes such as the Coronavirus Job Retention Scheme, HMRC has confirmed that such debt collection work is now being restarted in an effort to support the economic recovery.

HMRC Guidelines

When a client owes tax, HMRC makes every effort to contact them via phone, mail, or text message so that we may discuss their position and agree on a course of action. HMRC urge customers to respond to these communications as soon as possible because, unless they can discuss their situation, they cannot tell if they need support or are simply refusing to pay.

You as a customer can check if the contact you receive from HMRC is genuine, by using HMRC guidance on how to identify HMRC-related scam phone calls, emails, and text messages. Contact your local Accountants in London to help you get the right understanding of your situation. 

In all cases, HMRC will work with customers to find a way for you to pay off your tax debt as quickly as possible, and in an affordable way for you. Because everyone is different, the help HMRC offers differs from one customer to the next. For example, they can talk about reasonable payment choices like a payment plan (called Time to Pay) in which clients pay what they owe in affordable installments. At any one moment, HMRC has more than half a million agreements in place, with more than nine out of ten of them succeeding.

Set Up a Time-to-Pay Arrangement

If a taxpayer is unable to pay the due tax in full, they may be able to work out a payment plan- Time-to-Pay Arrangement with HMRC that allows them to pay in installments.

If you have already been approached by HMRC, you should contact the tax office that sent the communication to discuss setting up a time-to-pay arrangement. You can also call HMRC's Payment Support Service if you face any problems (0300 200 3825). The taxpayer should have their unique taxpayer reference number and bank account information available before calling.

HMRC will want to know the amount of the bill that they are struggling to pay and why they are having problems paying it. They'll also want to hear what the client has done to try and get the money together. They'll also consider how much the client can pay right away, as well as how long they'll need to pay the outstanding amount

Once a time-to-pay arrangement has been reached, it's important that payments are made on time and in line with the terms of the agreement. Failure to do so may result in legal action.

Enforcement Action

From September 2021, if a taxpayer fails to communicate with HMRC or follow the conditions of an agreement, HMRC may initiate enforcement action to recover the amount. They have a variety of tools at their disposal, including the ability to seize goods, issue summary warrants, and take legal action (including insolvency proceedings).

Debt advice

Individuals and businesses who are having difficulty paying HMRC and other creditors can often benefit from expert debt counsel. Our consultants can assist you by offering information on how to obtain this assistance.

Contact Taj Accountants

Our presence is much more than a distant email or voicemail, by working hand in hand to achieve your goals we can assist you to:

  • Save taxes
  • Keep your books and tax returns according to the Regulatory Authority
  • Manage your business accounts throughout the year
  • Keep you updated with the latest financial amendments to your interest
  • Give you full access to expert knowledge and support
  • Offer Accountants in London at a reasonable price.

DISCLAIMER: The purpose of the blog is to provide information and insight regarding the situation. The readers must contact experts before making any decisions based on the information. We highly appreciate you contacting Taj Accountants for further assistance.