Research reveals HMRC’s debt balance at the end of March 2023 at £45.9 billion. This figure is £4.3 billion higher than the balance at the end of March 2022.
In last week’s Autumn Statement, the Chancellor announced a ‘capacity boost’, directing millions into HMRC’s debt management team.
This comes following concerns over a rising “debt mountain”, with the debt balance at the end of March 2023 at £45.9 billion. This figure is £4.3 billion higher than the balance at the end of March 2022 and includes £43.9 billion of tax debt (which equates to 5.4% of revenues) and £2.1 billion of tax credits debt.
At the end of 2022 to 2023, HMRC was managing £5.7 billion of debt through time-to-pay arrangements, in which customers pay off their debt in affordable and sustainable instalments.
Andrew Park, a Partner in Tax at Price Bailey, comments:
In a welcome move given the scale of uncollected debts facing HMRC, it’s positive to see the £163m ‘capacity boost’ directed towards HMRC’s debt management team.
Increased funding means increased focus and greater productivity; reducing the size of this enormous debt mountain with have a big impact on the UK’s fiscal health.
In the policy description, HMRC detailed that “additional funding will also enable the acquisition of new data to allow HMRC to provide a more tailored approach to debt collection for companies”.
This comes as HMRC undergoes a multi-year transformation project using digital data and technology to better tackle the problem of unmatched payments – payments sent to the department with neither the correct reference number nor customer name.
Andrew Park, Partner in Tax at Price Bailey
Of course, for business owners, the importance of staying on top of financial management and cashflow is always vital but especially so when an obvious increased focus on tax debt collection is on the horizon.
NOTES TO EDITORS
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