The taxman is to use debt collection agencies to chase late payers, it was revealed yesterday, in a move that accountants branded as “dangerous”. HM Revenue & Customs (HMRC) will write to selected businesses and individuals this week telling them that a debt collection agency will be appointed unless they settle their bill. A spokesman said: “We have identified a number of potential debt packages to trial. These cover a range of types of tax, sizes and ages of debt, and include both individual and business debtors.” While the debt collectors will be allowed to write to and telephone late payers during the six-month trial, they will not be permitted to visit people’s homes or carry out any litigation work, HMRC said. Other government departments, such as the Department for Work and Pensions, already use debt collection agencies, but experts said that they had concerns about HMRC employing such agencies. Mike Warburton, of Grant Thornton, the accountant, said: “HMRC has powers and obligations that other organisations don’t have. Debt collection agencies don’t have the same code of conduct and there is a worry that they could act in a way that HMRC wouldn’t. This is basically outsourcing, and it is very dangerous.” Chris Tapp, of CreditAction, the debt charity, said that there were “serious issues” over the appointment of debt collection agencies. “Debt collection is still an industry that, with some notable exceptions, in many ways seems to thrive and function by creating a climate of fear,” he said. “We would urge HMRC and anybody thinking of using these organisations to make sure there is proper oversight of the system.” HMRC said that it was starting the scheme to try to boost returns for the taxpayer. “As would be expected, we prioritise our resources and collection methods. We retain a flexible approach [over] debts to ensure we get the best result for the taxpayer. Using private sector capacity has the potential to complement this approach and that is what we are now exploring.” HMRC’s coffers have been badly dented by the economic slowdown and it recently pledged to spend £1 billion chasing tax evaders. The pilot scheme has raised concerns over the security of taxpayers’ information, which will be shared with debt agencies as part of the trial. HMRC came under fire in November 2007 for putting the personal details of 25 million Britons at risk after losing the child benefit database on two CDs. HMRC said that it would hand over only “limited” information to agencies and that security measures used by the Department for Work and Pensions when it uses debt collectors were working effectively. “The security of customer data will be paramount,” a spokesman said. Angela Beech, tax partner at Blick Rothenberg, the accountant, said: “HMRC is growing increasingly desperate to collect tax, which can often be a long process. They no doubt hope that using a specialised agency focusing on late payments will help them to collect more tax more quickly.” Debt collection agencies came under fire from the Office of Fair Trading last week, when it warned them to stop using neighbours to pass on messages to people whom they were pursuing. .