Under Chancellor Jeremy Hunt’s proposals, debt collection agencies will be contracted to chase down those who owe money to the tax authority. This move comes as the Office for Budget Responsibility revealed that the amount of unpaid tax available for collection has doubled in four years.

Treasury officials clarified that the plan would not involve private bailiffs but rather “desk-based” activities like phone calls, text messages and letters. It will also include increased use of “time to pay” arrangements, where HMRC spreads payments over a longer period if people cannot pay in full.

The Chancellor said: “I will provide HMRC with the resources they need to ensure everyone pays the tax they owe leading to an increase in revenue collected of over £4.5bn.”

The scheme, set to commence next month, is expected to raise £240 million in its first year, rising to £895m in 2025-26. It will be achieved through £140m of additional funding for HMRC to expand the use of private debt collection agencies.