Source · Select Committees · Public Accounts Committee
Recommendation 18
18
Deferred
Older HMRC debts are less likely to be repaid, requiring tailored interventions.
Recommendation
As HMRC’s debts get older, they are less likely to be repaid.52 HMRC stressed the importance of tackling the new debt before it ages.53 We asked whether HMRC has a new approach planned for tackling older debts.54 It said it 47 Report on 2023–24 Accounts, para 7 48 Qq 37-38 49 Q 34 50 Report on 2023–24 Accounts, para 7; C&AG’s Report, HM Revenue & Customs Annual Report and Accounts 2022–23, Session 2022–23, HC 1466, 17 July 2023, para 1.14 51 Qq 35-36 52 Report on 2023–24 Accounts, para 7 53 Q 36 54 Qq 36-37 13 has investment for getting better data from credit reference agencies and better customer insights, which it will use to tailor its interventions on older debts based on customer behaviour and the type of customer.55 Reducing the tax gap
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.