HMRC is set to become more aggressive in 2026, with new powers and technology to recover unpaid tax. If you’re a UK company director, ignoring HMRC is no longer an option. Chris Worden explains what you need to know and how to protect your business.
Summary
- HMRC is owed over £40 billion and is under pressure to recover it.
- Expect more enforcement, frozen bank accounts, and winding up petitions.
- Time to pay arrangements are cancelled if you miss a payment or filing.
- Directors can face personal liability for company tax debts.
- Act early: communicate with HMRC and seek professional advice.
Why HMRC Is Tougher Than Ever
Since 2020, HMRC’s unpaid tax has doubled. The government has hired thousands of staff and upgraded technology, allowing HMRC to cross-match data and act quickly. Delays and leniency are over—expect rapid escalation if you fall behind.
What HMRC Can Do in 2026
- Direct bank recovery: HMRC can take money directly from your bank or ISA if you owe over £1,000.
- Field force visits: Enforcement agents can visit your premises and take control of goods.
- Cancelled time to pay: Miss a payment or filing, and your arrangement is cancelled instantly.
- Winding up petitions: HMRC is the most active petitioner in the UK, even for smaller debts.
- Personal liability: Directors can be made personally liable for company tax debts.
- Automated penalties: Late filings and payments trigger instant penalties.
- AI-driven investigations: Discrepancies are flagged automatically, leading to more audits.
Common Mistakes Directors Make
- Ignoring HMRC letters and calls.
- Overestimating future income and hoping problems will resolve.
- Using VAT or PAYE money for cash flow.
- Entering unrealistic time to pay arrangements.
- Filing returns late, even if you can’t pay.
How to Protect Your Business
- Face the numbers: Know exactly what you owe and when it’s due.
- File on time: Submit all returns, even if you can’t pay.
- Contact HMRC early: Proactive communication builds credibility.
- Offer realistic repayments: Don’t overpromise—show cash flow evidence.
- Protect your conduct: If insolvent, your duty is to creditors.
- Seek professional advice: Insolvency practitioners like Chris Worden can help.
- Avoid panic payments: Don’t pay one creditor at the expense of others.
Options If You Can’t Pay HMRC
- Time to pay arrangement: Affordable monthly payments if you stick to the terms.
- Liquidation: If recovery isn’t possible, liquidation can protect you and creditors.
- CVA: A Company Voluntary Arrangement can restructure debts if the business is viable.
- Administration: Provides protection while you seek to rescue the business.
Key Takeaways
- HMRC’s approach is now fast, aggressive, and technology-driven.
- Ignoring problems leads to enforcement and loss of control.
- Early action and professional advice are critical.
- Chris Worden and Director First can help you negotiate and protect your business.
FAQs
- What happens if I ignore HMRC in 2026?
- Ignoring HMRC can lead to frozen bank accounts, cancelled payment plans, and winding up petitions.
- Can HMRC take money directly from my bank?
- Yes, HMRC can recover tax debts directly from your bank or ISA if you owe over £1,000.
- What should I do if I can’t pay my tax bill?
- Contact HMRC early, file all returns, and seek advice from an insolvency professional.
- Can directors be personally liable for company tax debts?
- Yes, if HMRC believes you have deliberately avoided payment, you may be personally liable.
- How can Director First help?
- Director First, led by Chris Worden, can help you negotiate with HMRC and explore your options.
