Recommendation 8

We have received written evidence that HMRC repeatedly pursues small debts over a number of years.24 We asked HMRC whether this was disproportionate to the size of the debt. HMRC told us it takes a risk-based approach to debt management and will pursue even small debts if it is cost-effective to do so. It said that small debts will stay on a taxpayer’s record and HMRC will periodically contact taxpayers for payment.25 Each year HMRC judges particular debts as no longer worth pursuing, either because there are no practical means of pursuing that debt or because it is not worthwhile on value-for- money or hardship grounds. In 2022–23 these revenue losses totalled £3.8 billion, up from £2.4 billion in 2021–22.26 HMRC told us it expects these losses to continue to increase as HMRC progresses with clearing its debt balance.27 Address registration