Source · Select Committees · Public Accounts Committee
Recommendation 11
11
In addition to its own debt management staff, HMRC also uses private sector debt collection...
Conclusion
In addition to its own debt management staff, HMRC also uses private sector debt collection agencies to increase its capacity and work with specific customer groups.26 HMRC works with these agencies through an arrangement called the ‘debt market integrator’, which is run by Indesser (a joint venture between the Government and TDX- Equifax). The agencies do not undertake field visits—they are limited to desk-based 19 Q 91; C&AG’s Report, para 3.24; Written evidence submitted by Jim Harra, Chief Executive and First Permanent Secretary of HMRC, dated 28 January 2022 20 C&AG’s Report, para 3.13 to 3.14 21 Qq 85–87; C&AG’s Report, para 3.10 22 Qq 90, 91 23 Q 91; C&AG’s Report, para 3.24; Written evidence submitted by Jim Harra, Chief Executive and First Permanent Secretary of HMRC, dated 28 January 2022 24 Qq 62, 120, 125, 129 25 Committee of Public Accounts, HMRC Annual accounts 2020–21, 37th Report of Session 2021–2022, HC 641, 11 February 2022 26 Qq 63, 64, 92 12 HMRC’s management of tax debt activity—and have collected £2.3 billion of tax debts since 2015; a return on investment of more than £18 for every £1 spent. HMRC currently has a budget of around £26 million per year to contract private sector agencies, and it expects agencies to collect almost £500 million of debt this year.27 27 Qq 63, 64, 92; C&AG’s Report, para 3.19 HMRC’s management of tax debt 13 2 HMRC’s use of data to manage increased tax debt HMRC’s use of data to manage taxpayers in debt
Government Response
Not Addressed
HM Government
Not Addressed
2: PAC conclusion: HMRC is not being ambitious enough in bringing down debt levels and securing the resources this will require. 2: PAC recommendation: There is a clear value for money case to increase debt management capacity. HMRC should set out how much more tax debt it can bring in with increased levels of capacity using private sector and public sector options and write to the Committee alongside its Treasury Minute response with its findings and the actions it is taking to maximise value for money. 2.1 The government agrees with the Committee’s recommendation. Recommendation implemented 2.2 HMRC provided evidence to the Committee on 17 January 2022. Subsequently, at Spring Statement 2022, the government announced an additional £62 million over three years to fund additional staff in HMRC to help people and businesses pay their tax debts. This will raise an additional £1.8 billion for the Exchequer between 2022-23 and 2024-25. 2.3 In total, HMRC is recruiting almost 2,000 debt collection staff in 2022-23 to fill vacancies and utilise the additional funding granted at Spring Statement 2022 and previous fiscal events. 2.4 In addition, from September 2022, there will be a new contract through which HMRC places debt with private debt collection agencies (DCAs). This will allow HMRC to increase placements with DCAs by around £1 billion a year without increasing the cost to the Exchequer. 2.5 The government believes the information here, and provided at Spring Statement 2022, is sufficient for the Committee to be reassured that HMRC is taking action to maximise value for money and that a separate letter to the Committee is no longer required.