Service: VAT 

HMRC is restarting their debt collection activities

By Jo Reed

12 Jul 2021

HMRC has recently stated that their debt collection work will restart soon and is advising individuals and businesses to get in touch as soon as possible, where they have fallen behind with any payments to HMRC.

There are a variety of ways that HMRC attempts to collect outstanding tax: letters, texts, phone calls, and premises visits. HMRC can, as a last resort, instigate winding up procedures for a business but it would prefer to come to an agreement with a business or individual to recover any outstanding taxes, wherever possible.

It is always more helpful, to you, if you can be proactive about managing your HMRC debts. There are ways in which HMRC can help: short-term deferrals or a more formal time to pay requests.

  • Short-term deferrals are, as they sound, with nothing to pay for within a short timeframe.
  • Time to pay is a payment plan where you can pay the debt in a more affordable way over a longer period of time.

Gerald Edelman can advise you on the information HMRC may require and help navigate this process. Proactive management of any debts can give you more control over the future.

HMRC has stated that they will try to help in a practical way where a business faces financial uncertainty, as a result of the coronavirus pandemic, and will also talk about other forms of support that may be available, tailoring advice to your circumstances.

A new scheme launched in May 2021, administered by the Insolvency Service, Breathing Space, is also available. It is designed to give those struggling with debt a breathing space of 60 days where creditors may freeze most interest and penalty charges and you will have access to debt advisors who will manage the process. 

There is another type of breathing space available, with stronger protections and a longer breathing space for those suffering from mental health problems.

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