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When it comes to HMRC debt, the burden of financial obligations can amplify the uncertainty and stress associated with debt. Therefore we urge you to get in touch with HMRC and convince them to agree upon a repayment plan early as possible.

This article provides a comprehensive guide on the duration of HMRC debt and how long the agency can pursue it.

Anonymous Writer
Last updated on 12 June 2023
 Fact Checked

Table of Contents

1. What is HMRC Stands for in the UK?
2. The Concept of HMRC and HMRC Debt
3. The Birth of an HMRC Debt: Incurrence of HMRC Debt
4. How will you know whether you owe HMRC Money?
5. Consequences of HMRC Debt
6. The HMRC Can Take Your Belongings
7. What is HMRC Direct Recovery?
8. Understanding the Chase of HMRC’s Debts: How Long Can HMRC Chase a Debt?
9. Can My Tax Credit HMRC Debt Become Statute Barred?
10. Dealing with HMRC Debt: Steps to Resolve It
11. Are There Other Debt Collectors to Be Aware Of?
12. Contacting HMRC about Your Debt
13. Final Thoughts: HMRC Debt and the Pursuit


What is HMRC Stands for in the UK?

First, We need to discuss “what HMRC stands for” to understand about HMRC debt. HMRC stands for “Her Majesty’s Revenue and Customs”

It is the official department that is responsible for collecting, paying, administering and enforcing taxes under the authority of the UK government.

The Concept of HMRC and HMRC Debt

HMRC has various roles. One of them is to ensure individuals and businesses pay the right amount of taxes. They handle different types of taxes. And its ranges from income tax to VAT

It’s in charge of tasks like 

  • Collecting taxes, 
  • Paying certain types of state support, 
  • And overseeing various regulatory regimes. 

But what happens when you fall short of meeting these tax duties? 

This is where HMRC debt comes into play. Let us find out what HMRC debt is.

The term HMRC debt refers to any outstanding financial obligation owed to Her Majesty’s Revenue and Customs (HMRC)

This could result from majorly due to your, 

  • Unpaid taxes, 
  • Overpaid tax credits, 
  • Or unremitted VAT, among others.

But you might ask, 

1. What exactly does it mean to have an HMRC debt? 
2. And how could this happen?

And the big question is, “How long can HMRC chase a debt?” 

Let’s get to know more HMRC debt concept and its operations before finding an answer to the above question.

The Birth of an HMRC Debt: Incurrence of HMRC Debt

Dealing with HMRC debt is a situation anyone might encounter. Have you ever considered how such a debt comes into life? 

Well, it’s simpler than you might imagine. Let’s take a closer look.

A Slip of the Hand

A missed tax payment, incomplete tax payment or even any other outstanding debts can unknowingly land you in HMRC’s ledger of debtors. 

The debt ball starts rolling the moment you fail to settle your tax obligations. 

But how does this happen, you may wonder?

A Bill Becomes an HMRC Debt

HMRC dispatches a bill for unpaid tax upon detecting the deficit in your tax payment. This unpaid bill takes the form of a debt which is known as an HMRC debt

You might feel the urge to neglect it. But remember ignoring the problem won’t make it go away.

The Snowballing Debt

This unpaid tax debt doesn’t remain stagnant. It continues to increase until you pay the full amount of tax due. 

Increasing debt can make your financial situation tense. That’s the least thing that can happen.

How will you know whether you owe HMRC Money?

HMRC Dept department will reach out to you directly. They aim to provide you with all the documentation and guidance regarding your Debt case. These reach outs are done using all the forms of contact details that they have on you.

Bellow are reach-out methods they commonly use.

1. Phone call,
2. Letters (Including LBA – Letter Before Action),
3. Emails,
4. In extreme cases, debt collectors and even bailiffs will visit your home to inform you about the case or repossess some of your belonging.

The letters, emails and phone calls will keep coming towards you until you reply back. And the knocks on the door will occasionally happen if you fail or refuse to get in touch with them, and a considerable time has passed only.

Therefore we urge you not to disregard any of the letters sent by HMRC debts. 

Consequences of HMRC Debt

There are several possible outcomes when HMRC debt is left unpaid.

You could get,

  • Fines: HMRC can impose penalties for late or non-payment of taxes.
  • Interest: Interest may accrue on the outstanding debt over time.
  • Legal action: HMRC might even take legal action to recover the debt in extreme cases.

These legal actions can come in 3 ways,

  • Agreement to a payment plan.
  • Order to seize your valuable belongings and sell them on auction to cover up the debts using bailiffs
  • Order to Recover debts using HMRC Direct Recovery.

You might be wondering by now: “How can I avoid these consequences?” 

  • The simple answer to this is to Stay up to date with your tax responsibilities. 

But what if you already have an HMRC debt, and it’s too late?

The HMRC Can Take Your Belongings

Yes. HMRC Debt enforcement officers (also known as HMRC Bailiffs) have the authority to visit your home to inspect and seize your valuable belongings. Then they will sell them in an auction and use that money to cover up your debts.

The crucial fact is that you will have to pay extra to the HMRC Debts for the expenses that they had to do for seizing and transportation plus selling your goods.

But there is a catch. 

  • HMRC will give you notice that shows their due to arrive and seize your goods. 

Therefore you will still have time to discuss and get into an agreement with them for a payment arrangement. 


What is HMRC Direct Recovery?

HMRC (Her Majesty’s Revenue and Customs) Direct Recovery is an administrative power which allows them to recover tax and tax credits from debtors’ bank accounts(Including – IVAs) or benefits. Here IVA stands for Individual Savings Accounts.


HMRC Debt can use this option only if,

  • You owe them more than £1000 and have enough money in your bank account to fulfil the debt.
  • They can verify and assure whether recovering money from your bank will make your day-to-day living life not vulnerable.

So don’t get worried too much about this method.

Understanding the Chase of HMRC’s Debts: How Long Can HMRC Chase a Debt?

Let’s consider a question that might be popping into your head right now. What exactly does it mean for HMRC to “chase” a debt? 

Essentially chasing a debt involves HMRC seeking to recover money owed to them. Sometimes HMRC has to investigate more than 20 years of old documents to find proof of a particular debtor’s guilt. It takes time, as you can see.

But the million-dollar question is,  how long does this chase last?

The Duration: How Long?

There’s no one-size-fits-all answer here because the length of time HMRC can chase a debt depends on a variety of factors. 

This includes the 

1. Type of debt in question
2. And the unique circumstances surrounding it.

For instance, Tax Credits like debts are typically pursued for up to four years. 

Don’t you feel intrigued? But this is just the tip of the iceberg.

The Exceptions: When Can the Chase be Indefinite?

I know precisely what has come into your mind right now. “Four years doesn’t sound so bad.” 

But here’s where it gets tricky. There are some debts that HMRC can chase indefinitely. 

Yes, you read that right. Indefinitely. Don’t you feel like it’s time to scratch your head right now? And wonder how that’s even possible. 

The exact reasons and conditions for this extended chase will be unfolded in the subsequent discussion. 

Stay tuned! 

The Conundrum: When Debts Turn into Decades

It’s one thing to think of a debt lingering for a few years. But what happens when those years turn into decades? 

When a debt becomes seemingly unreachable and continues to loom over your head for an extended period can indeed become a daunting prospect.

One of the key concerns in these cases is the accumulation of interest and additional charges. The outstanding debt may grow significantly as time goes by. And it will amplify the financial burden placed on you or your businesses. 

What might have initially been a manageable amount can quickly spiral into an overwhelming sum. And it might become even more challenging for you to repay.

Moreover, the stress and psychological impact of carrying a debt for decades cannot be overlooked. The constant worry and anxiety about a lingering financial obligation can take a toll on your mental and emotional well-being. And could even affect various aspects of your life.

Can My Tax Credit HMRC Debt Become Statute Barred?

YES and NO. But it’s important to note that this rarely applies to HMRC debts. HMRC has the authority to pursue these debts even after several years have passed, adding to the complexity and anxiety surrounding the situation. 

Some debts may become statute-barred after six years. Thus Offering potential relief to individuals facing prolonged financial burdens. But as you can see it’s not definite for HMRC depts.

It is crucial to take proactive steps towards resolving the HMRC debt as soon as possible to address this challenging scenario. 

Ignoring the debt or hoping it will magically disappear is not a viable solution.

Instead, you should consider reaching out to HMRC and initiating a conversation about repayment options.

Dealing with HMRC Debt: Steps to Resolve It

Have you ever thought of the daunting prospect of facing an HMRC debt? 

  • Most probably, you will say no!

When you think about this, don’t you feel like having anxiety or distress?

  • Yes indeed.

Well, the good news is there are specific steps you can take to effectively deal with it. Let’s Discuss these steps one by one.

Step One: Reach Out to HMRC

The first and foremost step must be to confront the problem head-straight. This involves contacting HMRC. And it should be done as soon as you realise you have a debt. 

Yes, it might give you a scary feeling. But remember ignoring the debt will not make it disappear. 

1. Take a piece of paper and write down all the questions that pop into your mind and make the story around it.
2. Then make the call
3. Speak up with them politely. The story should convince HMRC that you are really facing financial trouble in carrying out your day-to-day life.

So, how about picking up the phone and taking the first step towards resolving your debt?

Step Two: Arrange a Payment Plan

Let us introduce you to the concept of a payment plan if you’re worried about how to pay off the debt. Wondering what it is? 

  • A payment plan is an agreement you make with HMRC to pay off your debt in instalments. 
  • HMRC is usually open to discussing a payment plan based on your financial situation. 

They will surely come to an agreement if you convince them enough with your talk. Because they just want their money back, after all.

Is it not exciting? But wait, there’s more!

Step Three: Seek Professional Advice

What if You find it challenging to:

1. Work out your finances.
2. Or to negotiate a payment plan with HMRC?

Don’t worry. There’s a solution for that too. It may be better for you to seek professional advice from a debt advisor. They can provide expert guidance on managing your debt and dealing with HMRC.

Are There Other Debt Collectors to Be Aware Of?

The Wide World of Debt Collection

It’s not just the HMRC debt that you need to be mindful of. Are you aware that there are several other agencies that might be on your trail for unpaid debts? 

There certainly are! Let’s delve into who these collectors might be.

The Usual Suspects are,

Below are some potential leading debt-collecting agencies in the UK.

1. Cabot Financial,
2. Lowell Financial,
3. and PRA Group.

They each specialise in managing and collecting delinquent debts. Keep an eye on your credit statement at all times(or check monthly) as if you have debts. It’s because these firms are the sharks when it comes to debt collecting.

The Importance of Debt Control

So, why is it essential to be aware of these debt collectors?

It’s because it’s crucial to keep your debts under control to steer clear of any unpleasant surprises. 

Imagine having multiple organisations on your back for debt repayment if you think managing HMRC debt was significant!

Contacting HMRC about Your Debt

You can contact HMRC directly if you’re ready to resolve your debts. 

Mediums that you can use to reach out to HMRC

1. Using the official HMRC app,
2. Through your personal tax account,
3. Or by Telephone – 0300 200 3887

Their lines are open from Monday to Friday, between 8 am and 6 pm. For more information, click here on their government website.

Taking this step will allow you to start negotiating your debt repayment and steer clear of any legal complications.

Final Thoughts: HMRC Debt and the Pursuit

In conclusion, the HMRC can chase a debt indefinitely until it is fully resolved. 

Therefore, the most sensible approach is to 

1.Tackle the debt head-on,
2. Engage with HMRC, 
3. And arrange a suitable repayment plan.

Remember, ignoring the issue will only lead to more complications.

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