Bills of Exchange fraud

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Can You Pay HMRC With a ‘Bill of Exchange’?

The short answer is no. HMRC does not accept Bills of Exchange as a way to pay off tax bills. If a company or promoter tells you that you can use a Bill of Exchange to legally wipe out your HMRC debt, they are misleading you—it is a fraudulent scam.

Here is everything you need to know about this new tax fraud warning and how to protect yourself and your business.

What is the ‘Bill of Exchange’ Scam?

HMRC recently issued an urgent warning about fraudsters who are tricking businesses into believing they can get out of paying their taxes.

A “Bill of Exchange” is an old legal concept dating back to 1882. It is essentially a written note asking someone to pay a sum of money. While they do exist in law, no one is ever legally forced to accept them as a form of payment. HMRC has made it absolutely clear that they will reject any Bill of Exchange used to try and pay a tax liability.

Scammers and promoters will offer to manage this fake process for you, charging you a handsome fee to draw up official-looking legal documents and contact HMRC on your behalf. They try to make the scam sound legitimate by using complex legal jargon like “Public Trusts”, “Merchant Law”, or “Negotiable Instruments”. They might even lie and say that HMRC or top lawyers (King’s Counsel) have approved the scheme.

If you are looking for genuine ways to be tax-efficient, it is always better to read up on legitimate allowances, such as How to avoid paying tax on self-employed income using standard government-approved deductions, rather than falling for “get-out-of-tax-free” tricks.

Who are the Fraudsters Targeting?

Organised crime groups are heavily pushing this scam towards employers, payroll providers, recruitment agencies, and the temporary labour sector. The scammers are falsely promising that a Bill of Exchange can help bypass the new umbrella company legislation introduced in April 2026. This is completely untrue.

However, they are not stopping at recruitment—any business in the UK could be approached with this scam.

The Real Cost to Your Business

Getting involved in one of these schemes can be financially devastating. Not only will you lose the money you paid the promoters for their “service,” but your original tax debt to HMRC will remain completely unpaid.

Because your tax will be overdue, HMRC will hit you with added interest and heavy penalties. Dealing with the fallout of unpaid tax is stressful, and while you can sometimes look into an HMRC late filing penalty appeal for genuine mistakes, using an avoidance scheme makes things much harder to defend.

What Should You Do?

If you suspect that you, your business, or your clients have accidentally gotten involved in this payment model, you need to contact HMRC right away.

It is always better to come forward and admit the mistake before HMRC comes looking for you. If you are worried about the repercussions of coming clean, you can read our guide on What is the penalty for voluntary disclosure to HMRC? to understand how HMRC handles people who proactively try to get their taxes back on track.

If you are approached by someone offering a tax-saving arrangement that sounds too good to be true, you can report them to HMRC using their online tax fraud reporting form. You do not even have to give your name or email address—you can submit your report completely anonymously.

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