Source · Select Committees · Public Accounts Committee
Recommendation 17
17
Deferred
High levels of new tax debt continue, prompting HMRC to secure funding for more staff.
Recommendation
HMRC said it is still seeing very high levels of new debt coming into the system, largely as a result of cash-flow issues in small businesses.49 In the Autumn Budget 2024 it received funding for a further 1,800 debt management staff. This follows an additional £303 million in 2023–24 and £47.2 million in 2022–23 to improve its capacity to manage tax debts.50 HMRC said it will target the additional staff at these new debts, with staff mainly on HMRC’s debt helpline and a small amount on enforcement activities.51
Government Response Summary
HMRC will respond in September 2025 with its expectations for the tax debt balance by 2029-30 and plans for older debts, allowing for the outcome of the Spending Review Phase 2 to be taken into consideration. They also mention increased staffing and efforts to reduce new debt.
Government Response
Deferred
HM Government
Deferred
The government agrees with the Committee’s recommendation. Target implementation date: September 2025 5.2 The tax debt balance has remained over £40 billion for almost three years, and around half of this is over 12 months old. This is despite HMRC resolving over £100 billion of tax debt each financial year and reflects that the flow of new debt created each year remains higher than historical levels. 5.3 HMRC has received more funding at recent fiscal events to help it collect more tax debt. HMRC will have more staff dedicated to debt collection in 2025-26 than it has had in any year since 2014-15. HMRC is also looking at ways to reduce the amount of new tax debt that arises, including making it easier for customers to pay on time. 5.4 HMRC will respond to the Committee in September 2025 with its expectations for the tax debt balance by 2029-30 and plans for older debts. This will allow for the outcome of the Spending Review Phase 2 to be taken into consideration.