Sun, 1 May 2011

HMRC’s debt reclaim practices under fire

Small business owners have revealed growing concern over HM Revenue & Customs’ debt reclaim tactics, following the emergence of a letter questioning its policies towards late payers.

In the letter, published in the Mail on Sunday last month, HMRC threatened to seize the addressee’s possessions and auction them off, while warning of the impact on public services if taxes were unpaid.

This prompted business owners to speak out about their own experiences of the department’s activities, many of whom expressed concern its Time To Pay scheme is being phased out.

Shop owner Tizania Trabalza told Payroll World she recently received an ultimatum from HMRC, demanding she pay £6,000 immediately, following several years on a Time to Pay plan. These plans support businesses struggling to meet payments in the challenging economic climate.

‘HMRC used a forceful tone, issuing a straight order that it would seize my stock,’ said Trabalza. ‘In the past, the Revenue has been supportive, but this time the whole thing seemed different. I said it could bankrupt me and the Revenue was quite prepared to see that happen.’

A senior policy adviser from the Forum of Private Business, the body that protects the interests of small businesses, said it was receiving numerous complaints from its members. ‘There is creeping evidence of growing intolerance by the taxman towards some small businesses, with demands for upfront payments of thousands of pounds at a time when many simply cannot afford it. This is a real shame because HMRC’s Time To Pay scheme has been a real success story.’

But HMRC insisted that neither the scheme nor its debt reclaim tactics had changed. ‘We think it’s important to be honest with people about the possible consequences of nonpayment,’ said a spokesman. ‘We have an excellent track record for helping those in genuine difficulty, but can only do this when people get in touch and work with us.’