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UK Gov't Launches Major Debt Collection Project

by Robert Lee, Tax-News.com, London

23 December 2014


The UK Government has launched a new joint venture with the private sector to claw back GBP22.6bn (USD35.3bn) in unrecovered debt.

A new company – Integrated Debt Services Limited – jointly owned by the government and TDX Group, an Equifax company, will provide a single point of access to a wide range of debt management and collection services of a number of government departments and the wider public sector from next year. It will initially work with six customers – HM Revenue and Customs (HMRC), the Department for Work and Pensions, the Home Office, the Student Loans Company, the Legal Aid Agency, and the Driver and Vehicle Licensing Agency (DVLA).

Debt owed to the Government, which stands at approximately GBP22.6bn, originates from many sources. These include unpaid taxes, fees, fines and loans, ineligible benefits or grants, and unrecovered costs from court cases.

The Government currently collects more than GBP40bn of debt every year, and already uses private sector organizations to deliver additional debt collection capacity. The Government said that while this has traditionally helped departments achieve significant improvements in debt recovery yields, the new strategic, cross-government approach will focus on returning even more money, by offering a single consistent tool for departments.

Local Government Minister Kris Hopkins said that local authorities will benefit from the initiative. He explained: "Improving tax collection and reducing arrears are a key way of making sensible savings to help keep overall council tax bills down and protect frontline services. Every penny of tax that is not collected means a higher tax bill for the law-abiding citizen who does pay on time … there is a significant potential source of income which councils across the country could use to support frontline services or freeze council tax bills next year, and this new service should help efforts to recover it."

TAGS: court | tax | public sector | law | fees | HM Revenue and Customs (HMRC) | HM Revenue and Customs (HMRC) | services | Pensions | Work | Pensions

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