UK Doubles Down on Private Debt Collectors Used to Recover Taxes

Her Majesty’s Revenue and Customs (HMRC), the UK equivalent of the US Internal Revenue Service (IRS), has doubled its use of private-sector debt collection firms over the last two years, according to a report from an accounting firm.

UHY Hacker Young said HMRC spent £14.8 million on external debt collection agencies in 2013 – up from £12.9 million the previous year, and more than twice the £6 million spent in 2011. The report covers the two years of the full implementation of the private debt collection program.

In the post-financial crisis austerity move, HMRC launched a private debt collectors tax recovery trial in 2009. After the success of the trial, the program expanded to full implementation with 10 contractors in 2011.

The report released over the weekend noted that there are now 13 private debt collection agencies working on the contract.

The news comes as the prospect of the IRS once again using private collectors becomes slightly more realistic with the introduction of a Senate bill that would direct the U.S. tax agency to do just that.