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What Happens When You Don’t Pay Your Taxes UK

Posted on by Murray & Lamb

Tax evasion is where an individual or corporation illegally avoids paying their due tax. Tax discrepancies can be because of miscalculations or mistakes; however, deliberate misrepresentation can also occur where the taxpayer intentionally reports their income or profit to be less than it is, reducing the apparent taxable amount. This criminal behaviour applies to all forms of tax, from income tax and duty to VAT. In this article, we’ll look at the ways that HMRC deal with tax discrepancies and evading.  

Different Ways HMRC Can Claim Back Tax

If you don’t pay your tax bill, there are a variety of ways that HMRC can react. The course of action that they take will depend on factors such as how much money you owe and your willingness to pay the money due. Should you find yourself in a situation where you think you won’t be able to pay your tax, you should contact HMRC immediately. Through their support service, you should be able to work out a reasonable solution and you will avoid financial penalties for late payment.

Some ways HMRC may recoup owed money include:

  • Making deductions from your salary or pension through changing your tax code – this can be done for tax debts from self-assessment taxes or National Insurance payments. The amount HMRC can take depends on your earnings, with figures up to £3,000 retrievable for earnings under £30,000.
  • Debt collection agencies – private debt collectors can be enlisted by HMRC to get back the money you owe them.
  • Taking control of goods – HMRC can take your possessions and sell them to pay off your debt. You will also be charged for the costs of selling the goods, e.g. auctioneer costs.
  • Taking money from your bank/building society account – this ‘direct recovery of debts’ would only be undertaken in special circumstances. This may occur if you repeatedly refuse to pay the money owed, have already had a face-to-face visit, and would still have at least £5,000 after the owed money is reclaimed. You would receive written warning before this occurred as well.
  • Take you to court – HMRC can take you to court if you don’t pay what you owe. The court can then reclaim the money in a variety of ways including by use of bailiffs, making you bankrupt or closing your company.

Tax Evasion

Tax evasion is much more serious than simply not paying the right amount of tax. Tax evasion is where a taxpayer acts dishonestly and intentionally flouts the rules to pay less tax. This is a criminal offence which can result in hefty fines and jail time, the extent of which will depend upon the seriousness of your individual actions and intentions.


Murray & Lamb is a leading accountancy firm in the North East with a team of skilled, knowledgeable chartered accountants and business advisors. We understand that paying your tax – whether as a business or through personal self-assessment tax returns – can be a confusing and complex process. Our highly trained professionals can help make this task much simpler for you, ensuring you meet all legal requirements and that you pay the correct, precise, amount on time. For more information about any of our financial services, don’t hesitate to get in touch with our helpful team.

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