Tax Debt Collection Restarts

HMRC has restarted debt collection activities with taxpayers. It will initially focus on activities relating to collecting debts from people who are least affected by Covid-19:

  • those who are most able to pay their tax debts
  • taxpayers who have not responded to any correspondence or
  • have not contacted HMRC to manage their account and arrears.

A total of approximately 27% of businesses that benefited from VAT deferral between March and June 2020 have failed to contact HMRC to pay the money they owe, even though the deadline to repay it or arrange a repayment plan expired on 30 June 2021. Approximately £2.7bn remains outstanding which will be subject to enforcement action from September 2021.

In addition to the deferred VAT, which remains outstanding, it is likely many businesses have failed to pay the associated PAYE and National Insurance contribution (NIC) on the Coronavirus Job Retention Scheme (CJRS) claims of furloughed employees (the CJRS grant paid businesses the gross employee cost which includes the PAYE and NIC).

If you are worried about any of the above, please contact the Tax Technical Team on 01253 874255.

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