HMRC’s approach to debt collection upon emerging from the pandemic

30 June 2021

HMRC has released a policy paper, which discusses how HMRC will approach collecting debts as the country emerges from the pandemic.

As economic activity recommences, HMRC will resume its debt collection work. This will involve, amongst other things, contacting individuals and businesses that have fallen behind on their tax payments. The resounding message is that those who can pay their taxes should do so, but where there is financial difficulty, HMRC will work alongside them to agree a plan based on their financial position.

HMRC will contact those with tax debts either by phone, post, or text message to discuss the situation.  Anyone who receives these communications is encouraged to respond as soon as possible, so that HMRC can clarify whether additional support is required or if an individual or business is refusing to pay.

HMRC offers a payment plan, called Time to Pay, which allows those in debt to pay what is owed in a series of affordable instalments. In scenarios where customers cannot pay anything straight away, HMRC may be able to offer a short-term deferral. This would mean that no funds are taken in an agreed set period, with no additional action taken until that time has passed.

More information regarding payment arrangements (Time to pay) is available online.

In scenarios where communications of this nature are not responded to, HMRC may visit home or business addresses. The majority of these visits allow HMRC to work with individuals or businesses to agree on an action plan for settling their debt.  As of September 2021, however, where there is refusal to discuss a payment plan or communications are ignored, HMRC may move to collect the debt using its enforcement powers. Tax will only be collected through insolvency proceedings where there is evidence of fraud or where debt continues to accumulate.

CIPP comment

Just an ongoing reminder to be vigilant to scams, the number of which have increased significantly throughout the pandemic. There is guidance available on identifying HMRC related scam phone calls, emails and text messages so that individuals can establish whether the contact is genuinely from HMRC or not.


The information in this article is accurate at the time of publication. For all the latest information, news and resources on how the COVID-19 pandemic is affecting payroll professions, visit our Coronavirus hub.