HMRC has spent more than £84 million on private Debt Collection Agencies (DCAs) in the three tax years to 2019/20 according to new figures.
The figures show that HMRC spent £32 million on DCAs, with £1.71 million being spent on final opportunity letters. In 2018/19, HMRC spent £26 million on DCAs, with £1.3 million being spent on final opportunity letters. Whilst in 2019/20, HMRC spent £26.1 million on DCAs, with £1.24 million being spent on final opportunity letters.
Over the three tax years, this adds up to more than £84 million.
Jesse Norman, Financial Secretary to the treasury, revealed the figures she said “As part of their overall collections strategy, debt collection agencies (DCAs) provide HMRC with additional capacity.”
“The department keeps under review the cost effectiveness and value for money that using DCAs provides to the exchequer and UK citizens. There are no current plans to move away from using agencies to send final opportunity letters.”
An HMRC spokesperson added: “By engaging directly with customers on HMRC’s behalf, DCAs have helped and supported thousands into affordable payment plans. Regulated by the FCA, all DCAs follow strict code of conduct and HMRC approved guidelines for dealing with our customers.”
“They don’t make any visits or take enforcement action on behalf of the department. All contact is by letter, SMS or phone. And over the last few years DCAs have contributed directly to HMRC’s improving performance towards reducing the tax gap – the difference between what tax is owed and how much of it is paid.”