Tackling the tax debt

HMRC’s decision to suspend most debt collection during the Covid-19 pandemic has led to large increases in the amount of tax owed to HMRC according to a recent National Audit Office report. Total tax debt was £42bn in September 2021 more than double the level going into the pandemic and peaked at £67bn in August 2020.

The NAO concluded that HMRC had acted quickly by pausing debt collection to reduce pressure on debtors and improved its understanding of how the pandemic was affecting taxpayers. It subsequently launched its return to collection campaign and made it easier for taxpayers to repay debt online which led to taxpayers repaying debt faster than expected. However there was concern for the current staffing to manage the increased workload and estimates that adding staff and private sector capacity would have most success in increasing debt collection.

Dawn Register...