Credit Score Basics > Does HMRC run a credit check?

Does HMRC run a credit check?

Wollit Team1 minute read · Updated 17th September 2024

If you owe money to HMRC (Her Majesty's Revenue and Customs), you might wonder if they check your credit score. The simple answer is no, HMRC does not run a credit check. However, they sometimes do exchange information with the credit reference agencies. Here is how it works and what you need to know.

What is HMRC?

HMRC is the UK government department that collects taxes and manages tax credits. They make sure the government has enough money to pay for public services like schools and hospitals. They also make sure that people follow tax laws.

Does HMRC conduct credit checks?

No, HMRC does not usually run credit checks on your credit file like banks or lenders do. HMRC does not check your credit score when you file your taxes or when they look at your tax situation. This means that just owing money to HMRC won’t automatically affect your credit score.

However, HMRC may use information from credit reference agencies to find out more about you.

For example, they might check data to find if you have hidden partners in tax credit claims. However, this doesn’t mean they are checking your credit score or reporting your tax debts to these agencies. They just want to make sure that you’re paying tax correctly and are not claiming benefits incorrectly.

Can owing money to HMRC affect my credit score?

No, simply owing tax does not affect your credit score. Owing money to HMRC does not directly lower your credit score because these debts are not reported to credit agencies. So, having an unpaid tax bill won’t hurt your score or make it harder to get loans or mortgages.

However, if HMRC takes legal action against you for unpaid taxes, this could lead to a County Court Judgment (CCJ). A CCJ would show up on your credit report and lower your credit score by quite a bit.

Also, if you can’t pay your debts and go bankrupt because of unpaid taxes, this will severely impact your credit score too. Bankruptcy also stays on your record for six years and can make it very hard to get credit again in the future.

Stay on top of your tax debts and you’ll avoid all the unpleasantness that comes with not paying them, from fines and even jail time to bad credit.