- HMRC carried out a call for evidence entitled ‘Modernising Tax Debt Collection from Non-Paying Businesses’ to engage with external stakeholders early in the policy development, to gather evidence and test their initial thinking. The summary of responses included four proposals where the government intends to carry out additional consultation and develop policy and/or new legislation. These are:
- extending taking control of goods to those with no UK assets, or assets at a principal place of business such as a premises where they carry out a trade or business, such as a fulfilment centre or third party warehouse;
- extending taking control of goods to in-house leasing which have historically been used to avoid civil recovery action against debts owed by the main business;
- extending Direct Recovery of Debt to Digital Wallets; and
- security deposits to recurring non-paying businesses. This regime can currently only be used in cases where there is serious non-compliance with reporting the correct tax liability due to avoidance and evasion of tax and not in cases where a business simply does not engage with HMRC.
- Two further areas were also identified (extending taking control of goods to intangible assets and extending Directors Personal Guarantees) however HMRC believe that these require careful consideration and stakeholder engagement around how they could be implemented in the best possible way.
- At the Spring Budget on 6 March 2024, an additional £140 million was allocated to improving HMRC's ability to manage tax debts.
- Timing: there is no set timeline at the moment for when HMRC plan to implement 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)
