Select committee: Public Accounts Committee
Recommendation 5
3rd Report - HMRC Customer Service and Accounts
Published 22 Jan 2025
Addressed to HM Treasury
Public Accounts Committee HMRC Customer Service and Accounts 2023-24 All items in this report Report on parliament.uk ↗ Inquiry on parliament.uk ↗
Recommendation (the committee's words)
HMRC’s investment in debt management has not sufficiently reduced the amount of tax owed to it. In 2023–24, the government announced £303 million additional funding for HMRC to improve its capacity to manage tax debts. This followed £47.2 million announced in 2022–23. Despite this investment, the tax debt balance fell only marginally in 2023–24, from £43.9 billion at 31 March 2023 to £43.0 billion at 31 March 2024. This is still much higher than the five years before the pandemic, where tax debt was typically around £15 billion. HMRC is still seeing high levels of new tax debt, largely driven by small businesses’ cash flow issues. HMRC says its efforts are focused on pursuing these new debts, which are easier to collect. We are concerned, though, that HMRC is not effectively pursuing older debts. It has estimated it may not be able to collect 45% of established taxpayer liabilities not yet received. In 2023–24, HMRC wrote off £5.0 billion of debts as uncollectable, an increase from £3.2 billion in 2022–23. HMRC expects the amount of write-offs to remain high in 2024–25 as the impact of the pandemic on insolvencies continues to work its way through the criminal justice and tax systems. In the 2024 Autumn Budget, HMRC received funding for 1,800 more debt management staff. 5 recommendation Now that HMRC has secured even more resources to manage the debts owed to it, it should set out what reduction in the debt balance it is aiming for and by what date, and a plan for how it will recover older debts before they become uncollectable.
From: Public Accounts Committee, 3rd Report - HMRC Customer Service and Accounts (HC 347), 22 January 2025
Government response
Latest Treasury Minutes progress report to the Committee of Public Accounts on the Third Report of Session 2024-26
The government responded to the whole report on 4 June 2026.
Treasury minutes: Government response to the Committee of Public Accounts on the Third report from Session 2024-25
Published 6 May 2025.
Summary written by Accountability Index from the government's response. It is not the government's own words.The government agrees with most of the Committee's recommendations, with target implementation dates ranging from March 2026 to March 2028 for several, but disagrees with reinstating a call waiting time target and with the proposed resourcing "guard rails" and corrective trigger.
- On a call waiting time target, the government "disagrees". It says ASA "remains a key performance metric" and that its Adviser Attempts Handled measure and customer satisfaction metrics give "a more rounded view" of the experience for all callers.
- The government agrees that call waiting estimates, no cut-offs without warning and a callback service should be required in a new telephone service, with a target implementation date of March 2027. It says the new Contact Service platform procurement will launch in spring 2025.
- The government disagrees with setting a trigger when service levels fall more than five percentage points below target. It says HMRC is "always reviewing plans and forecasts of demand" and adjusting resourcing "day-by-day and week-by-week".
- On tax debt, the government agrees, and HMRC "will respond to the Committee in September 2025" with its expectations for the debt balance by 2029-30 and plans for older debts, allowing for the outcome of Spending Review Phase 2.