Millions in unpaid business tax after HMRC blunder

HMRC changed its bank account details without telling businesses, resulting in tens of millions of pounds in corporation tax and VAT not being collected by the government, the Daily Telegraph has reported.

Despite having tried to pay their tax, numerous big businesses have received late payment notices from HMRC, as the payments went uncollected.

In February this year, HMRC changed its International Bank Account Number (IBAN), which is a method of paying predominantly used by overseas businesses.

Firms affected by the change were meant to be notified last year, but it appears that not all of them received the notification about the change.

“The change certainly seemed to have been poorly managed as businesses have not had sufficient warning,” said Tina Riches, a partner at accountancy firm Smith and Williamson.

“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.”

The accountancy firm also reported that one client discarded the letter due to a belief it was a scam, as the letter was poorly worded.

A spokesperson for HMRC 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.”