Businesses unable to pay millions in tax – as HMRC changed its bank details without telling them

money

Large tax payments from a number of businesses have bounced and remain uncollected, The Daily Telegraph has discovered, leaving firms with late payment penalty notices and in the dark over how to pay.

In February HMRC changed its bank account details for firms which pay tax using IBAN, a method mainly used by overseas businesses but also by some domestic companies.

In an employer bulletin last year it said affected businesses would be notified, but a number were not, it has emerged. Last night tax experts said the failings, which fly in the face of HMRC’s public claims that it is successfully closing the UK’s tax gap, are likely to be the “tip of an iceberg” which could leave a huge hole in the Government’s coffers.

It comes as the taxman is embarking on a major cost-saving exercise in which all 170 of its offices across the country are being replaced by 13 new regional tax centres.

A senior executive within the tax department of a listed multinational company, who asked not to be named, told this newspaper the first he knew about his £6m VAT instalment being rejected was when the firm received a late payment notice.

He said: “Our payment is now nearly a month overdue and we have still not received instruction from HMRC on how to pay. The way they have handled it is so shambolic, I would not be surprised if this is a much wider issue.”

Firms who did receive letters telling them about the change said they were so amateurish they assumed they were bogus. Accountancy firm, Smith and Williamson, said one client had discarded the letter advising them to make payment to a new bank account as they assumed it was a scam due to its poor wording.

Tina Riches, a partner at Smith and Williamson, said: “The change certainly seemed to have been poorly managed as businesses have not had sufficient warning. These cases may just be the tip of the iceberg as although there was some advance notice in a couple of HMRC publications, those notices did not include the vital BAN number businesses need to make payments. If it is, then there could be a significant hole in the Government’s revenues, which is obviously a big problem.”

A HMRC spokesperson said: “HMRC’s move to a new bank will be invisible to most customers, who will not need to do anything different when sending payment to HMRC. Customers paying from overseas will need to update their payment details. Anyone experiencing difficulties in making payments should contact HMRC immediately.”