HMRC Fails to Collect Millions of Corporation Tax

The Telegraph has revealed that tens of millions of pounds in VAT and corporation tax has not been collected by the government. HMRC changed its bank details in February without informing all businesses, which has resulted in a number of firms receiving late payment penalty notices and uncertainty about how to pay.

The changes to the bank details will mostly affect overseas companies, but there are also a number of domestic companies which have seen their payments bounce. Despite this, HMRC claims it is successfully closing the “tax gap”. This error comes as HMRC begins its major cost-saving exercise and digitisation which will see its regional offices be reorganised into 13 new tax hubs.

The Telegraph reports that some business executives were unaware of their instalments being rejected and the only notification was the late payment notice. He said: “Our payment is now nearly a month overdue and we have still not received instruction from HMRC on how to pay. The way they have handled it is so shambolic, I would not be surprised if this is a much wider issue.” 

Some of the firms which did receive changes to HMRC’s bank details said that the quality of the communication was so amateurish that they were dismissed as fake. A HMRC spokesperson said: “HMRC’s move to a new bank will be invisible to most customers, who will not need to do anything different when sending payment to HMRC. Customers paying from overseas will need to update their payment details. Anyone experiencing difficulties in making payments should contact HMRC immediately.”