- In 2023, HMRC published a summary of responses to its 2021 call for evidence entitled ‘Modernising Tax Debt Collection from Non-Paying Businesses’ outlining the following four proposals for additional consultation and developing policy and/or new legislation:
- extending taking control of goods to those with no UK assets, or assets at a principal place of business;
- extending taking control of goods to in-house leasing;
- extending Direct Recovery of Debt to Digital Wallets; and
- security deposits to recurring non-paying businesses.
- Two further areas of potential reform were identified (extending taking control of goods to intangible assets and extending Directors Personal Guarantees), subject to careful consideration and stakeholder engagement.
- The above was proposed by the previous government and the current government has not planned any specific actions on this.
- The government announced a series of plans to boost HMRC’s debt management capacity by recruiting additional debt management staff to expedite HMRC's processing of tax debt enquiries (plans for 1,800 staff were announced in 2024 and for extra 600 staff announced in March 2025. Recruitment for these roles has already started) and by investing £87 million over the next five years in HMRC's existing partnerships with private sector debt collection agencies.
- HMRC also intends to re-start “direct recovery” of tax debts owed by individuals and companies who have the ability to pay but choose not to do so.
- Finally, the government announced that they will also explore options to automate the process for collecting lower value tax debts.
- Timing: there is no set timeline for implementing any changes.
Resources (click to open)
- Modernising tax debt collection from non-paying businesses – summary of responses (HMRC, summary of responses, April 2023)
- Call for evidence: modernising tax debt collection from non-paying businesses (HMRC, consultation, November 2021)
