HM Revenue & Customs’ reliance on private debt collectors has reached new heights, with the department spending more than £5.2 million in a single month with its primary recovery partner—a figure critics warn is being extracted from struggling small businesses.
Analysis by the Parliament Street think tank of HMRC transparency data reveals the department paid TDX Group £5,289,528.65 in February 2026 for debt recovery and insolvency services. This represents an increase of just over £2 million from January’s £3,236,829.26 and dwarfs the £4,070,045.89 spent in December 2025.
The escalation coincides with Chancellor Rachel Reeves increasingly prioritizing tax compliance to address Treasury shortfalls, while wage growth across the broader economy remains stagnant.
For TDX Group, the surge in government work has translated into strong financial performance. Company records at Companies House show turnover climbing from £63.2 million to £79.7 million over the past two financial years, with operating profit doubling from £3.7 million to £7.5 million in the same period.
This trajectory shows little sign of reversing. In the Autumn Budget 2024, the Chancellor confirmed 5,000 additional HMRC compliance officers would be phased in by 2029-30—a recruitment drive the Treasury expects to deliver around £7.5 billion annually in extra revenue once fully operational. A further 500 officers were approved at the Spring Statement 2025, with hiring beginning in the 2025-26 financial year.
For smaller businesses already dealing with employer National Insurance increases, persistent borrowing costs, and weakening consumer demand, the intensified pursuit of arrears is being felt sharply.
“These figures will rub salt in the wound of struggling businesses forced to tackle higher taxes, operating costs and surging interest rates,” said Kenny MacAulay, chief executive of accounting software platform Acting Office. “Faced with sizeable overheads, companies will be looking to make use of AI and technology to cut costs and balance the books.”
“It beggars belief that the Chancellor’s debt collectors are raking in millions whilst hardworking taxpayers are struggling to make ends meet,” said Patrick Sullivan, chief executive of the Parliament Street think tank. “It’s time for a radical rethink of government expenditure, with a clampdown on millionaire debt collectors who are getting rich at the expense of working people.”
TDX Group declined to comment on the specifics of its arrangements, citing the confidentiality of contractual relationships.
HMRC defended its approach, emphasizing that enforcement is a last resort. “Most customers meet their tax responsibilities, with 90 per cent paying in full and on time,” a spokesman said. “We take a supportive approach to dealing with customers who have tax debts and do everything we can to help those who engage with us to get out of debt, including offering instalment plans.”
For SME owners wondering whether the pressure will ease, the direction from government suggests otherwise. With thousands more compliance officers coming on stream and outsourced collection activity scaling rapidly, the cost—both financial and reputational—of falling behind on a tax bill is rising significantly.