Persistent high level of tax debt gives Government £45bn target to aim at
Persistent high level of tax debt gives Government £45bn target to aim at
The publication of HMRC’s annual report and quarterly performance indicators reveal that overall tax debt owed to the Exchequer has fallen by 3% year-on-year to a total of £44.6bn.
Tax debt as a proportion of total tax revenue also fell from 5.4% in 22/23 to 5.1% in 23/24.
Around £7bn of the total is classed as ‘managed debt’ leaving £37.5bn ‘available for pursuit’.
Commenting on the new figures, Dawn Register, BDO’s Head of Tax Dispute Resolution said:
“While the decline in overall tax debt is welcome, £45bn is still a huge sum of money that is going unpaid.
“With the chancellor looking to fill a £22bn budget shortfall in the public finances, going after those who can but don’t pay seems like a no-brainer.
“Those in genuine financial hardship should be encouraged to use Time to Pay arrangements. However, the number of people in Time to Pay arrangements has actually fallen year-on-year. HMRC could and should do more to persuade those in arrears to take advantage of these Time to Pay facilities, over 90% of which are completed successfully. For those with debts of below £30,000 these can be set up fairly easily online.
“Clearly, some of the tax owed won’t be recoverable, but you might have hoped that recent investments in HMRC’s tax debt management capabilities would have had more of a significant impact. Instead the decline in overall tax debt over the last year has been modest at best.
“We know that the Government has committed to extra resources and staffing for HMRC, although we don’t yet know the extent of this future investment. What is clear is that with £45bn of tax owed but going unpaid, there’s a huge target for the chancellor to aim at if she’s looking to plug a hole in the public finances.”
ENDS
The organisations we work with are Britain’s economic engine; entrepreneurially-spirited, high-growth businesses that fuel the economy.
We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.
BDO LLP
BDO LLP operates in 17 offices across the UK, employing 8,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 115,000 people working out of 1,776 offices worldwide. It has revenues of US$14bn.
Email: frank.x.shepherd@bdo.co.uk
Tel: 07812 463601
Tax debt as a proportion of total tax revenue also fell from 5.4% in 22/23 to 5.1% in 23/24.
Around £7bn of the total is classed as ‘managed debt’ leaving £37.5bn ‘available for pursuit’.
Commenting on the new figures, Dawn Register, BDO’s Head of Tax Dispute Resolution said:
“While the decline in overall tax debt is welcome, £45bn is still a huge sum of money that is going unpaid.
“With the chancellor looking to fill a £22bn budget shortfall in the public finances, going after those who can but don’t pay seems like a no-brainer.
“Those in genuine financial hardship should be encouraged to use Time to Pay arrangements. However, the number of people in Time to Pay arrangements has actually fallen year-on-year. HMRC could and should do more to persuade those in arrears to take advantage of these Time to Pay facilities, over 90% of which are completed successfully. For those with debts of below £30,000 these can be set up fairly easily online.
“Clearly, some of the tax owed won’t be recoverable, but you might have hoped that recent investments in HMRC’s tax debt management capabilities would have had more of a significant impact. Instead the decline in overall tax debt over the last year has been modest at best.
“We know that the Government has committed to extra resources and staffing for HMRC, although we don’t yet know the extent of this future investment. What is clear is that with £45bn of tax owed but going unpaid, there’s a huge target for the chancellor to aim at if she’s looking to plug a hole in the public finances.”
ENDS
Note to editors
Accountancy and business advisory firm BDO LLP provides integrated advice and solutions to help businesses navigate a changing world.The organisations we work with are Britain’s economic engine; entrepreneurially-spirited, high-growth businesses that fuel the economy.
We understand the ambitions and entrepreneurial mindset of those we work with and have the global reach, integrity and expertise to help people and businesses succeed.
BDO LLP
BDO LLP operates in 17 offices across the UK, employing 8,000 people offering tax, audit and assurance, and a range of advisory services. BDO LLP is the UK member firm of the BDO international network.
BDO’s global network
The BDO global network provides business advisory services in 166 countries and territories, with more than 115,000 people working out of 1,776 offices worldwide. It has revenues of US$14bn.
Contacts
Frank ShepherdEmail: frank.x.shepherd@bdo.co.uk
Tel: 07812 463601