HM Revenue & Customs (HMRC) is ramping up its debt collection efforts, spending over £5 million each month on private agencies to recover overdue taxes. Between October 2025 and February 2026 alone, HMRC paid debt collection firm TDX more than £21.1 million to oversee these operations.
This surge in spending marks a 73% increase in costs from January to February 2026, with payments totaling £5.2 million in the latest month. TDX coordinates with several private agencies to pursue unpaid tax obligations from both individuals and businesses.
The aggressive approach comes as Chancellor Rachel Reeves pushes to increase tax revenues, including plans to hire an additional 5,000 HMRC tax officials over the next five years—500 of whom were confirmed following last year’s Spring Statement.
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However, this strategy has drawn criticism from industry experts. Kenny MacAulay, CEO of accounting software provider Acting Office, cautions that outsourcing debt collection to private firms “will rub salt in the wounds” of businesses already struggling with higher taxes, operational costs, and rising interest rates.
Lucy Sauvage, senior director at Alvarez & Marsal Tax, added that interacting with HMRC can be intimidating, with long wait times and debt agents who may be overly persistent.
Meanwhile, concerns grow over a current HMRC consultation on tax rules for small, closely held companies. The accountancy firm Blick Rothenberg argues the proposed measures do not adequately address key issues and risk adding further regulatory complexity without effectively closing the tax gap.
In response, HMRC emphasized that the majority of taxpayers—90%—pay their taxes fully and on time. The agency asserts it adopts a supportive stance toward those with tax debts, offering assistance such as payment installment plans for those who engage with them.