Can HMRC Debts be Written off?

If you owe money to Her Majesty’s Revenue and Customs (HMRC) then you should pay this as soon as possible. This is classed as a priority debt and not resolving this could lead to legal action or bailiff visits. If you’re not in a position to resolve accounts with HMRC then get in touch, we could determine whether these could be written off.

Struggling with tax debt?

HMRC (Her Majesty’s Revenue and Customs) is the body responsible for taxes such as income tax, national insurance, VAT arrears, and tax credit. Unlike some forms of debt, these expenses are considered priority and – as a result – should be paid as soon as possible.

Otherwise, the consequences could be severe – potentially resulting in legal action or bailiffs. Fortunately, help is available. We have a proven track record in dealing with HMRC debt and could help you get on top of your finances.

Initially though, when attempting to get on top of HRMC arrears, you may wish to consider the following steps:

Managing your debt with HMRC

Is HMRC right?

It’s easy to assume that a large government body such as HMRC is right 100% of the time. However, this is not the case. From lost letters to incorrect calculations, the organisation isn’t perfect.

Therefore, you should double-check any demands for repayment to make sure they’re accurate. If you believe that a mistake has been made, contact HMRC and request they confirm their calculations.

Potentially, your tax debts could just be a simple mistake.

Confirm your financial situation with HMRC

If a demand for repayment is accurate though, you should budget carefully to identify if a bill can be repaid. If not, this may identify whether cutbacks need to be made or illustrate just what you can afford to pay HMRC.

By budgeting initially, you may be able to negotiate changes to your repayments. Of course, this is entirely at HRMC’s discretion.

Don’t ignore HMRC

The worst thing you can do, if in arrears to HMRC, is to ignore them. It’s important to keep them posted as to what measures you’re taking to repay the debt. If you choose us to help you, telling the firm we’re assisting you should effectively resolve the situation and stop them from sending demands for repayment.

It’s estimated that, every 48 seconds, someone seeks help for debts they can’t afford to repay.

What happens if you don’t pay HMRC

Not paying HMRC can have serious consequences. For example, the firm may initiate collections through direct recovery, bailiff involvement, legal action, and starting bankruptcy proceedings.

What is direct recovery?

HMRC has the power to recover funds straight from your bank or building society account should you fall behind on repayments. Fortunately, they won’t do this straight away and you’ll be notified as to when (or if) they plan to do so.

Does HMRC use debt collectors?

HMRC can (and does) use private debt collection agencies to collect arrears. This can, in turn, escalate to bailiff involvement where your assets may be confiscated to repay HMRC.

HMRC currently uses nine different debt collection agencies to reclaim debt. These are:
-LCS
-Advantis Credit Ltd
-Bluestone Credit Management
-BPO Collections Ltd
-CCS Collect
-Marston Regulated Services Ltd
-Moorcroft
-Oriel Collections Limited
-Past Due Credit Solutions

What legal action can I expect?

HMRC can take you to court to reclaim debts. In this situation, you may have to pay what you owe as well as cover the court’s costs.

Does bankruptcy clear HMRC debt?

Should you be unable to pay HMRC, the organisation may petition to make you bankrupt. Although bankruptcy should write off what you owe, your assets will also be sold so HMRC can recover as much of the debt as possible.

How long can HMRC chase a debt?

If HMRC launches an investigation into your finances, they can chase a debt which as old as 20 years. However, the standard timeframe for an investigation is four. Therefore, if you’re hoping HMRC will simply forget about what you owe – they won’t.

Can you get HMRC debts written off?

It is possible to get HMRC debts written off through a debt solution such as an IVA. However, the firm has to agree to this. As a result, you should be in a position where the solution ultimately grants HMRC more money than they would otherwise have gained through bankruptcy.

Why you must pay HMRC as soon as possible

Failing to pay HMRC can result in serious consequences. Chances are though, you already know this. In an ideal world, you would have the money to send to HMRC but we know sometimes that just isn’t possible.

The good news though is that we can help. With a proven track record in resolving HMRC debts, we’re expertly placed to provide the support you need. Get in touch today through the simple application form below and we’ll be able to identify a solution suitable for your needs.

   

Why choose us?

  • We help more than 500 people every day.
  • We have more than 15 years’ experience in debt across our companies.
  • On average, we write off £13,500 per client.
  • 120 staff members are here and ready to support you.

HMRC Debt FAQs

Does HMRC debt affect credit ratings?

Does HMRC debt affect credit ratings?

Unpaid taxes shouldn’t have a direct impact on your credit score as agencies such as Experian and Equifax haven’t used tax debts on reports since April 2018. However, being in debt to HMRC will still have other consequences, such as potential legal action.

Can HMRC debt be included in an IVA?

Can HMRC debt be included in an IVA?

HMRC debts can be included on an IVA.