Source · Select Committees · Public Accounts Committee
Recommendation 15
15
Accepted
HMRC's strategy prioritises preventing non-compliance through taxpayer support and guidance.
Conclusion
HMRC told us that the pandemic created difficulties for taxpayers, and that the economic situation since has continued to put pressure on them.25 HMRC’s strategy in recent years has increasingly focused on preventing non-compliance occurring in the first place, including by helping taxpayers get their tax affairs right.26
Government Response Summary
The government will continue flexible repayment practices and enhance the online 'Time to Pay' service with Spring Budget 2023 funding. This aligns with HMRC's strategy to help taxpayers manage their affairs and prevent non-compliance, supported by additional staff and private debt collection agency funding.
Government Response
Accepted
HM Government
Accepted
4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 The department has a strong track record in providing flexible repayment practices to support people and businesses in temporary financial difficulty and will continue to do so. At the end of December 2022, around 731,000 taxpayers had around £4.8 billion worth of debt in Time to Pay (TTP) instalment arrangements. 4.3 At Spring Budget 2023, the government announced funding for improvements to the department’s online TTP service. HMRC has already extended this service to PAYE and most recently VAT. The Spring Budget funding will allow for increased functionality to allow more taxpayers to arrange their own flexible repayment plans at a time convenient for them. 4.4 The department constantly monitors whether it has sufficient resources for debt recovery work. The resource available for HMRC for its compliance work is agreed with ministers at spending reviews. The agreed level is shaped by economic factors and enables HMRC to carry out the compliance activity required to maintain a stable tax gap over the medium term. 4.5 At the Spring Statement 2022, the government provided funding for an additional 500 staff over three years for debt management activity. The recruitment process is complete, and the staff are in place supporting people and businesses to pay their tax debts. 4.6 In addition, the government provided £20 million for the years 2023-24 and 2024-25 to place additional debt with private sector debt collection agencies. This will further help to address the increase in debt levels and provide additional and flexible debt collection capacity.