By Sinéad Campbell, Head of Money, Debt and Quality at Advice NI
The Government’s latest Budget included a detail that may have slipped under the radar for many people, but it won’t stay hidden for long. Funding for HMRC debt collection is being significantly increased, giving the tax authority more resources to chase unpaid tax from individuals and businesses.
For anyone already struggling with money, that could be worrying news. It means more letters, more pressure, more enforcement action and, for some, the risk of debts escalating faster than they can manage. At Advice NI, we know the impact this can have on mental health and financial stability because we see it every day.
HMRC’s enhanced debt-collection powers are designed to recover money owed to the public purse. But the reality is more complex. Many people fall into tax debt not through avoidance or irresponsibility, but because of irregular earnings, illness, caring responsibilities, or simply being overwhelmed by the complexity of the tax system. The same is true for thousands of sole traders and small business owners who are already facing increased costs, tighter margins and unpredictable cashflow.
With this new investment, we expect to see a surge in HMRC activity over the coming months; more repayment demands, more debt collection agencies being instructed, and more cases escalating earlier to enforcement. That means we are also preparing for a rise in calls from people who suddenly find themselves under pressure they don’t know how to deal with.
But here is the message I want people to hear – you do not have to face it alone.
The worst thing anyone can do when tax debt becomes unmanageable is to ignore it. Once enforcement begins, options narrow quickly. But when people come to us early, before things escalate, the outcomes are almost always better. Often, there are workable solutions, from Time to Pay arrangements to negotiating repayment terms or helping clients clearly explain their circumstances to HMRC. Sometimes, all that is needed is to help someone understand the letters and figure out what to do next.
What concerns me most is that many people still believe seeking debt advice is a last resort, something you only do when all else has failed. In reality, the earlier people get in touch, the more control they regain and the more we can do to prevent a difficult situation becoming a crisis.
The Government may be strengthening HMRC’s ability to recover debts, but independent advice services like Advice NI exist to ensure people are treated fairly, understand their rights, and have a trusted place to turn for support.
If you’re worried about tax arrears, or you’ve already received a letter from HMRC and don’t know what it means, please reach out now. Our advice is free, impartial, confidential and grounded in decades of experience supporting people and small businesses across Northern Ireland. Call 0800 915 4604 or visit www.adviceni.net