Debt collection agencies working for HMRC

Q: How might this work in practice?

Illustration only. Sam is self employed and owes £4,200 of Self Assessment tax from last January. Sam ignored three HMRC letters while moving house. A text arrives from Moorcroft Debt Recovery Ltd asking Sam to call about an HMRC debt. Sam checks GOV.UK, sees Moorcroft on the list, logs into the HMRC online account and confirms that the balance and reference match. Sam calls the agency, passes the security questions and explains that £1,200 can be paid now and £250 a month after that. The agency agrees the arrangement within its limits, takes the first payment and passes it to HMRC. If Sam had offered terms the agency could not accept, the case would have gone back to HMRC, which could then consider other options, including those described in our guide to HMRC taking control of goods.

Q: What mistakes do people make?

Ignoring the contact because it is not from HMRC. A listed agency is acting for HMRC, and an unanswered agency contact is one of the routes back to enforcement. Paying an unlisted firm. Check the name against GOV.UK and the balance against your HMRC account before paying anyone. Letting a relative or adviser speak without proper authority. Call consent lasts 24 hours per debt, so a longer running case needs formal authorisation. Offering more than you can keep up. A Time to Pay offer has to be affordable; a broken arrangement puts you back where you started, with more interest added. Disputing the tax with the agency. The agency cannot change the liability; the dispute has to be taken up with HMRC. If HMRC opens a check into your return, tax investigation insurance pays your accountant's fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

HMRC can pass an unpaid tax debt to a private debt collection agency when the taxpayer has not responded to HMRC or has refused to pay. The agency can only write, text or phone, can take payment or agree a Time to Pay arrangement, and has no enforcement powers of its own: if no deal is reached, the case goes back to HMRC.

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When does HMRC hand a tax debt to a collection agency?

HMRC’s published approach is to try to contact the debtor and agree a way forward before taking any action, except where it suspects fraud or criminal activity. A debt collection agency is one of two routes HMRC lists for cases where the taxpayer does not engage or refuses to pay; the other is a visit from an HMRC officer at home or at the business. In practice the agency route is used where a debt is established, letters have gone unanswered and HMRC wants a conversation about payment without yet using its enforcement powers.

The debt itself does not change when it moves to an agency. It is still owed to HMRC, it is still recorded on the HMRC account, and late payment interest keeps running, because interest on unpaid tax is a statutory charge that accrues until the tax is paid. The late payment interest rules apply in the same way whoever is chasing the debt.

Which agencies work for HMRC?

HMRC’s guidance on what happens if you do not pay your tax bill (updated on 23 October 2026) lists the agencies that may contact taxpayers on its behalf:

1st Locate, trading as LCS
Advantis Credit Ltd
Ardent Credit Services, trading as Debt & Revenue Services (DRS)
BPO Collections Ltd
BW Legal Services Limited
CCS Collect, also known as Commercial Collection Services Ltd
Moorcroft Debt Recovery Ltd
Pastdue Credit Solutions Limited

HMRC says every agency it uses is regulated by the Financial Conduct Authority, must follow HMRC’s processes and guidance at all times, and is reviewed regularly. The list changes from time to time, so check the current GOV.UK page rather than relying on an old letter or a saved copy.

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How can you check that a contact is genuine?

Because agency contact arrives by phone, text and letter, it looks a lot like the scams that use HMRC’s name. A few checks separate the two:

Is the agency on HMRC’s list? A firm that is not named on the GOV.UK page should be treated as suspect.
Has anyone turned up in person? HMRC states that an agency working for it will only contact you by letter, text message or phone and will never visit your home or place of work. Anyone at the door claiming to collect for HMRC on behalf of an agency is not following HMRC’s process. An HMRC collector is different: collectors are HMRC staff who carry an HMRC identification card that can be checked by phone.
Does the debt match your records? Compare the amount and tax reference with your HMRC online account or recent HMRC letters. A genuine agency is chasing a debt HMRC already holds on its systems.
Call back on a number you found yourself. If in doubt, contact HMRC’s Payment Support Service using the details on GOV.UK, not a number given in the message, and ask whether the debt has been placed with that agency.

Our guide to HMRC scam calls, texts and emails covers the wider warning signs, such as pressure to pay immediately or requests to move money to an unfamiliar account.

What can the agency do?

According to HMRC’s guidance, a debtor contacted by an agency can:

pay the agency what is owed, if able to; when the payment clears, the agency sends it to HMRC to credit to the taxpayer’s account
talk to the agency about paying by instalments under a Time to Pay arrangement

On a phone call the agency will ask security questions to protect the confidentiality of the taxpayer’s affairs. Someone else can speak for the taxpayer, but HMRC says consent given on a call lasts 24 hours for each debt discussed. For an adviser to act for longer, the taxpayer needs to give HMRC written authority through the normal agent authorisation process. If the taxpayer tells the agency that an agent acts for them, the agency has to check with HMRC that the agent is authorised before contacting them, which can cause a short delay.

What can the agency not do?

The agency is a collector, not an enforcer. HMRC’s guidance says that if you cannot pay in full or agree a Time to Pay arrangement with the agency, it passes the case back to HMRC, and HMRC then contacts you to say what will happen next. That means the agency cannot:

visit your home or business, take or list goods, or ask you to sign a controlled goods agreement
take money from your bank account; direct recovery of debts is an HMRC power
start county court proceedings, bankruptcy or winding up in its own name
change the amount of tax due or decide an appeal against it

HMRC lists a debt returned from a collection agency as one of the situations in which it may use its own enforcement powers. So while the agency itself cannot enforce, ignoring it usually moves the case closer to enforcement rather than away from it.

What if you dispute the debt?

An agency can only collect the figure HMRC has given it. If the underlying tax is wrong, for example because an estimate was raised when a return was not filed, the fix lies with HMRC: file the missing return, make the appeal or correction, and tell both HMRC and the agency that the figure is disputed. HMRC’s guidance on difficulties paying asks taxpayers who disagree with the debt amount to contact the Payment Support Service. Arguing the merits with the agency on the phone rarely gets anywhere, because the agency has no power to amend the liability.

How do you complain about an agency?

HMRC says complaints can go either to the agency or to HMRC, including where you are unhappy with how the agency handled your original complaint. The agency’s complaints process should appear on its letter or website and should meet the Financial Conduct Authority’s requirements. When complaining to HMRC, name the agency. If HMRC’s own handling of the complaint is unsatisfactory, the usual escalation through HMRC’s complaints process and the Adjudicator applies.

How might this work in practice?

Illustration only. Sam is self employed and owes £4,200 of Self Assessment tax from last January. Sam ignored three HMRC letters while moving house. A text arrives from Moorcroft Debt Recovery Ltd asking Sam to call about an HMRC debt. Sam checks GOV.UK, sees Moorcroft on the list, logs into the HMRC online account and confirms that the balance and reference match. Sam calls the agency, passes the security questions and explains that £1,200 can be paid now and £250 a month after that. The agency agrees the arrangement within its limits, takes the first payment and passes it to HMRC. If Sam had offered terms the agency could not accept, the case would have gone back to HMRC, which could then consider other options, including those described in our guide to HMRC taking control of goods.

What mistakes do people make?

Ignoring the contact because it is not from HMRC. A listed agency is acting for HMRC, and an unanswered agency contact is one of the routes back to enforcement.
Paying an unlisted firm. Check the name against GOV.UK and the balance against your HMRC account before paying anyone.
Letting a relative or adviser speak without proper authority. Call consent lasts 24 hours per debt, so a longer running case needs formal authorisation.
Offering more than you can keep up. A Time to Pay offer has to be affordable; a broken arrangement puts you back where you started, with more interest added.
Disputing the tax with the agency. The agency cannot change the liability; the dispute has to be taken up with HMRC.

If HMRC opens a check into your return, tax investigation insurance pays your accountant’s fees. Solar Protect cover pays up to £100,000 with no excess; it never pays tax, interest or penalties. Read how our cover works or get a quote.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.