HMRC Policy Paper: Tax Fraud Warning – Attempts to use ‘Bills of Exchange’ to Pay HMRC

On 13 May 2026, Zoe Gascoyne, Director of Fraud Investigation Service at HM Revenue and Customs, announced that HMRC had issued a Tax Fraud Warning to employers and recruitment agencies said to be targeted by promoters encouraging the use of “Bills of Exchange” (“BoE”) arrangements in an attempt to avoid or discharge tax liabilities.

HMRC’s published policy paper (13 May 2026) states in clear terms that HMRC does not accept Bills of Exchange or similar private instruments as payment of tax liabilities:

“Where customers attempt to use Bills of Exchange or promissory notes and refuse to pay the amount owed using HMRC’s usual payment methods, HMRC will use its enforcement powers to collect any outstanding amounts”.

Taxpayers who may have found themselves in a legally vulnerable position can nevertheless often improve matters substantially by engaging constructively with the issue and taking strategic advice at an early stage. HMRC’s own paper recognises that disagreement may arise concerning the amount of any alleged debt. What is often required is constructive engagement with HMRC rather than reliance upon promoters selling arrangements that many would regard as “too good to be true”.

It also remains the case that, even where a taxpayer has entered into arrangements that later transpire to have been misconceived, there may nevertheless exist procedural or substantive errors in HMRC’s own approach. Taking stock of the position carefully, and ensuring a coordinated strategy involving Counsel and the relevant accountant, can often pay dividends and reduce the inevitable stress and anxiety that can ensue.

Michael Paulin is a specialist tax barrister advising on complex HMRC disputes, investigations, Schedule 36 Information Notices, judicial review proceedings and cross-border tax litigation involving internationally mobile taxpayers and offshore issues. (Contact michael.paulin@1cor.com )