If your limited company has unpaid tax debts, HMRC may use an external debt collection agency to contact you and seek payment.
These agencies act on HMRC’s behalf, but they are not HMRC enforcement officers or bailiffs. Their role is primarily to contact you by letter, text message or phone and attempt to resolve the outstanding debt.
If your company has been contacted, verify the agency, confirm what is owed and deal with the problem promptly rather than ignoring it.
💡 Quick Answer
HMRC can use authorised debt collection agencies to pursue unpaid tax debts.
An agency working for HMRC may contact you by letter, text message or phone, but HMRC says its debt collection agencies will not visit your home or business premises.
If your limited company cannot afford the debt, verify the contact and consider speaking to HMRC about repayment options before the position escalates.
What Are HMRC Debt Collection Agencies?
HMRC is responsible for collecting unpaid liabilities including:
- VAT;
- PAYE and National Insurance;
- Corporation Tax; and
- other taxes and duties.
HMRC may initially pursue overdue payments itself.
It can also refer debts to authorised third-party debt collection agencies, which then contact taxpayers on HMRC’s behalf. HMRC says these agencies must follow its processes and guidance and are regulated by the Financial Conduct Authority.
Importantly, the debt still remains an HMRC liability. The agency is collecting it on HMRC’s behalf.
If your company has several outstanding tax liabilities, our HMRC Tax Debt guide explains the wider options available.
Which Debt Collection Agencies Does HMRC Use?
HMRC’s current published list includes:
- 1st Locate, trading as LCS
- Advantis Credit Ltd
- Ardent Credit Services, trading as Debt & Revenue Services (DRS)
- Bluestone Consumer Finance Limited, trading as Bluestone Credit Management
- BPO Collections Ltd
- BW Legal Services Limited, trading as BWL
- CCS Collect, also known as Commercial Collection Services Ltd
- Moorcroft Debt Recovery Ltd
- Pastdue Credit Solutions Limited
Do HMRC Use CCS Collect?
CCS Collect, also known as Commercial Collection Services Ltd, is currently included on HMRC’s list of debt collection agencies.
If CCS Collect or another agency contacts you about an HMRC debt, check the company name against HMRC’s current list before providing information or making payment.
How Will an HMRC Debt Collection Agency Contact You?
1. Check the Contact Is Genuine
Before discussing the debt or making payment, check:
- the name of the agency;
- the HMRC liability they say is outstanding;
- the amount claimed; and
- whether the agency appears on HMRC’s current published list.
If you are unsure, contact HMRC independently using contact details obtained from GOV.UK rather than relying solely on details contained in an unexpected message.
2. Check the Debt Is Correct
Make sure the company’s records agree with HMRC’s figures.
Check whether the debt relates to:
- Corporation Tax;
- VAT;
- PAYE;
- National Insurance; or
- another tax liability.
If you believe the amount is incorrect, raise the issue rather than simply ignoring contact.
3. Assess What the Company Can Afford
If the debt is correct but the company cannot pay it immediately, establish what the business can realistically afford.
A temporary cash-flow problem may be very different from a company that is unable to meet its liabilities generally.
4. Consider HMRC Time to Pay
Where the company cannot pay in full but can afford instalments, HMRC may consider a Time to Pay arrangement.
Read our HMRC Time to Pay guide or see how to apply for HMRC Time to Pay.
A repayment arrangement should be based on what the company can genuinely afford while continuing to meet future liabilities.
Can a Debt Collection Agency Send Bailiffs?
The agency itself is not the same as an enforcement agent attending business premises.
HMRC states that its external debt collection agencies do not visit homes or workplaces.
However, if an HMRC debt remains unresolved, HMRC has other enforcement powers and may escalate recovery separately.
Its own debt-management functions include field collection and enforcement activity, and serious cases can ultimately be referred for legal or insolvency action.
That is why receiving contact from a debt collection agency should be treated as a warning to resolve the underlying tax debt before matters progress further.
Can HMRC Take Enforcement Action Against a Limited Company?
Yes.
If agreement cannot be reached, HMRC can use enforcement powers to recover unpaid tax.
Depending on the circumstances and stage of recovery, this may ultimately involve:
- direct HMRC enforcement;
- action against company assets;
- court proceedings; or
- insolvency proceedings.
For directors facing a serious escalation, see our guides to HMRC Bailiffs and Winding-Up Petition Help.
Can HMRC Wind Up a Company Over Tax Debt?
Potentially.
Where a company owes HMRC money and the debt remains unresolved, HMRC can ultimately pursue insolvency proceedings, including a winding-up petition in appropriate cases.
That can lead to compulsory liquidation if the petition is successful.
If a company has reached this stage, directors should take advice quickly because the available options become more limited once a winding-up petition has been presented.
What If the Company Cannot Afford the HMRC Debt?
If the business cannot afford to repay its tax debt even through a realistic payment arrangement, the issue may be wider than short-term cash flow.
Possible options can include:
- a Company Voluntary Arrangement where the underlying business is viable;
- Company Administration where statutory protection and restructuring may achieve a better outcome; or
- a Creditors’ Voluntary Liquidation where the company is insolvent and cannot realistically continue.
The right approach depends on the company’s overall financial position rather than the HMRC debt alone.
Can HMRC Debt Be Written Off?
There is no general process where a director can simply ask HMRC to write off a company’s tax debt because the business cannot afford it.
Where a company enters a formal insolvency procedure, HMRC may receive only part of what it is owed, depending on the assets available and its creditor ranking.
That is different from HMRC casually agreeing to cancel the liability.
Directors should therefore be cautious about relying on claims that HMRC debt can easily be “written off”.
Need Help With HMRC Debt?
Contact from an HMRC debt collection agency is a sign that tax arrears need attention.
If the company can repay the debt, dealing with it promptly may prevent further escalation.
If the company cannot afford a realistic repayment plan, directors should consider whether there is a wider solvency problem.
Business Helpline provides free, confidential initial advice to limited company directors dealing with HMRC arrears and creditor pressure.
Call our free 24-hour helpline on 0800 088 2142 or request a confidential call back.
HMRC Debt Collection Agency FAQs
Are HMRC debt collection agencies legitimate?
Yes. HMRC uses authorised third-party agencies to help recover unpaid tax debts. Always check that the agency contacting you appears on HMRC’s current published list.
Can HMRC debt collectors visit my business?
HMRC says its external debt collection agencies will only contact taxpayers by letter, SMS or phone and will not visit their home or workplace.
Can an HMRC debt collection agency seize company assets?
An external collection agency contacting you on HMRC’s behalf is different from an enforcement agent. HMRC can use separate enforcement powers if a debt remains unresolved.
Can I arrange monthly payments?
Potentially. Where a company cannot pay its tax debt in full but can afford instalments, HMRC may consider a Time to Pay arrangement.
What happens if I ignore an HMRC debt collector?
The underlying HMRC debt does not disappear. If it remains unresolved, HMRC may continue or escalate its recovery action.
Can HMRC liquidate my company?
HMRC can ultimately petition to wind up a company where qualifying unpaid debts remain unresolved. Whether this happens depends on the circumstances and the stage of enforcement.
