For many companies experiencing financial difficulties, it is highly likely they will owe at least some money to HMRC. In fact, HMRC are the largest creditor of UK companies. Unfortunately for limited company directors, as well as being the biggest creditor, they are also one of the most impatient. As a large government department, they have a huge number of resources which can – and frequently are – used to chase companies who fail to pay the taxes they owe.
If you have fallen behind in your obligations to HMRC whether this is for VAT, corporation tax, PAYE, or a combination of all three, there will come a time where HMRC will be in contact with you asking you to bring your account up to date – this is often done by way of a reminder letter. This is the start of HMRC’s debt collection process.
How does HMRC debt collection work?
If you fail to bring your company's tax account up to date, or to enter into negotiations for a repayment plan after the initial reminder letter, HMRC will eventually issue a ‘final opportunity letter’ which, as the name suggests, is your last chance to repay your arrears before further action is taken.
The next step is for you to be visited in person by a HMRC debt collector. This visit can either be from a field force agent who is employed by HMRC, or by an external debt collection agency.
HMRC frequently update the third-party debt collection firms they use to recover arrears from limited companies. According to Gov.uk, the debt collection agencies currently engaged by HMRC to collected unpaid taxes are:
CCS Collect (also known as Commercial Collection Services Ltd) - 020 8665 4929
Moorcroft - 0330 123 9765
Past Due Credit Solutions (PDCS) - 0141 447 0554
If you have received a visit from one of these agencies, and you would like to make a payment towards your arrears, you will need to contact them directly. This is because once HMRC has appointed a third-party agency to collect the money on their behalf, they are the ones who will be responsible for taking payment. However, before you hand over any money to a debt collection firm, you should speak to HMRC first in order to verify the legitimacy of the agency and the amount which is owed.
Concerned about National Living Wage and NI increases?
With the rates of both National Living Wage and employer National Insurance Contributions increasing in recent years, this additional cost of employing staff has added more pressure onto already squeezed cash flows. If you are worried about the impact this is having on your company's finances, talk to the experts at UK Liquidators. As licensed insolvency practitioners we can explain your options and help you plot a way forward. Call today on 0808 253 9878.
What happens during a visit from a HMRC debt collector?
The sole aim of HMRC sending debt collectors to your business premises is to recover the money owed to clear your outstanding tax arrears. If you do not have available funds to clear your balance, HMRC debt collectors have the ability to seize company assets in order to cover the shortfall.
If you are unable to clear your balance but you want to avoid your assets being taken, there may be an opportunity to set up a Time to Pay (TTP) arrangement which allows you to repay the amount owed in a more affordable manner. You will typically be given a maximum of 12 months in which to clear your arrears, and during this time you must also continue to pay any further tax which falls due.
You can arrange a TTP with HMRC directly, or alternatively you can engage a UK Liquidators licensed insolvency practitioner to do this on your behalf if you would prefer. We have a huge amount of experience when it comes to dealing with HMRC, and we can use this to present your case in the best possible light, increasing your chances of being able to negotiate a TTP for your company.
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A visit from a HMRC collection or field force agent often represents an escalation of debt recovery efforts in order to recover tax arrears. If your company has failed to keep its tax obligations up to date for some time, this may hint at deep-rooted issues with your company's finances.
You should take this as a warning sign that you need to take steps to resolve the problems your business is currently facing. A company which has significant arrears to HMRC often owes money to other creditors which are proving similarly difficult to manage.
If you are in this position, you should seek expert help and advice from a licensed insolvency practitioner at the earliest available opportunity. They will be able to talk you through your options and provide independent and impartial advice as to the long-term viability of your company.
We can enter into negotiations with HMRC on your behalf, or explore the option of a Company Voluntary Arrangement (CVA) which is a more comprehensive formal repayment plan which can include a number of creditors, not just HMRC.
If your company’s financial problems are insurmountable, we can also talk you through the process of placing your company into liquidation and what this will mean for you, your employees, and also your creditors.
Start your online liquidation today
If you have decided liquidation is the right option for your limited company, you can take the first step and begin the process online using our online portal. Starting the process is quick, simple, and can be done at a time that suits you. Your information will be submitted to your local UK Liquidators insolvency practitioner who will be with you every step of the way. Click here to start your company’s liquidation online.
Contact UK Liquidators for help
If you have fallen behind in your tax obligations to HMRC, whether that is with unpaid PAYE, corporation tax, or VAT, the experts at UK Liquidators are here to help. Our licensed insolvency practitioners have a wealth of experience in assisting companies with HMRC arrears and other unmanageable debt situations.
The sooner you take advice, the more options will be open to you; however, regardless of whether you have recently fallen into HMRC arrears, and have received your first overdue tax letter, or whether you are further down the line and have been threatened with a visit from a HMRC field force agent, there are options out there.
Contact us today on 0808 253 5341 to arrange a free no-obligation consultation with your local UK Liquidators licensed insolvency practitioner.
Jonathan Munnery
Insolvency & Restructuring Expert | 20+ Years Insolvency Experience
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
IPA Member MABRP Member IPA Regulated
“ Directors often wait too long before seeking advice. The earlier you call, the more options remain available to you — and the better the outcome for everyone involved. ”
Jonathan is a Partner at Real Business Rescue and member of both the Insolvency Practitioners Association (MIPA) and The Association of Business Recovery Professionals (MABRP). Jonathan has over 20 years’ experience guiding directors through CVL and MVL processes, helping them understand their options and navigate financial distress with clarity and compassion.
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