David Jetuah, Accountancy Age, Thursday 29 July 2010 at 11:05:00

HM Revenue & Customs seals contracts with four external debt collectionsagencies in efforts to rake in an extra 140m

The taxman is farming out part of its debt collection operations to fourcompanies in moves to rake in an extra 140m of tax debt.

HMRC has signed contracts with Commercial Collection Services Ltd, CreditSolutions Ltd, Fairfax Solicitors Ltd, iQor Recovery Services Ltd to boostHMRC?s debt collection capacity and help the pursuit of lower value debts.

Following a successful pilot,HMRC announced in the Emergency Budget that itwas planning to use Debt Collection Agencies.

Safeguards have been put in place to ensure the companies operate underindustry and HMRC standards.

Nick Lodge, HMRC Director, Debt Management and Banking, said:

?We do understand that some businesses and individuals are not in a positionto pay what they owe and we have put procedures in place to help those who aregenuinely struggling.

But those who simply refuse to pay have to be pursued, and our partnershipwith DCAs ensures they will be.?

Before the debt is referred to a DCA, HMRC will write to the debtor givingone final opportunity to pay or reach an agreement, the taxman added.