Tax Debt Collection 'Can Improve'

HM Revenue & Customs (HMRC) can do more to improve management of tax debt, according to a report from the National Audit Office (NAO).

The report said that while the level of money owed had fallen from 4.3 per cent of all tax collected in 2005-06 to 3.8 per cent in 2007-08, HMRC had not implemented all the recommendations of a 2004 Commons public accounts committee report on the subject.

Other priorities had affected the pace of improvements in risk profiling, the creation of a single IT system and a more efficient phone centre operation.

The NAO also found that the number of individual debts had increased by 22 per cent as a result of HMRC devoting more resources into recouping larger, higher value debts.

NAO head Tim Burr said the improvements in debt management called for in 2004 would help HMRC maximise revenue in “a more difficult economic climate”.

“To manage tax debt more effectively, HMRC should link different debts owed on each tax by the same taxpayer and prioritise debts which are less likely to be paid without action by the department

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