Global Daily Tax News, HMRC Warns On Emerging 'Bills Of Exchange' Tax Fraud Scheme, (May 14, 2026)

The UK tax agency, HM Revenue and Customs, has warned recruitment agencies to avoid an emerging tax fraud scheme.

On May 13, 2026, the agency said: "HM Revenue and Customs (HMRC) has seen an increase in customers attempting to use 'Bills of Exchange' to pay a tax liability. We are aware that there are promoters, particularly in the recruitment and temporary labour sector, marketing their use. Organised Crime Groups are also particularly active in these sectors."

In its warning to the sector, the agency said it does not accept Bills of Exchange as a valid form of payment. It said: "While Bills of Exchange or promissory notes may be accepted elsewhere, HMRC does not accept Bills of Exchange or similar private instruments as payment of tax liabilities. Bills of Exchange cannot be used against a tax debt. Tax liabilities must be settled using HMRC's normal payment methods."

The agency has released a briefing setting out HMRC's position regarding the use of Bills of Exchange.

According to HMRC, under the arrangement, promoters claim that a Bill of Exchange can be used to wipe out an HMRC debt. They offer to manage the process for customers, particularly payroll providers, and act on the customer's behalf drawing up any affidavits and engaging with HMRC.

HMRC said: "Using these arrangements could significantly cost your business, not only through paying the promoter to use or facilitate their payment model, but also additional interest, penalties, or fees that may be charged by HMRC where a debt is not fully paid on time."

"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."

"This has recently been tested in the courts in the winding-up of a company, where the court accepted that the money orders or Bills of Exchange offered to HMRC in payment of the company's liabilities were not valid payment."