Connect with us

Hi, what are you looking for?

Editor’s Pick

HMRC ill equipped to hunt for billions owed in lockdown resurgence

Revenue & Customs is ill-equipped to hunt down tens of billions of pounds of extra tax it is owed from the pandemic because one in five of its workers have been laid off in efficiency drives, the spending watchdog says.

The National Audit Office has called for staffing levels to increase “significantly” to help the tax authority recoup the GBP42 billion it is owed, which is more than double the GBP16 billion it was owed in January last year.

The report lays bare the unprecedented debt burden built up by the self-employed and other businesses after the Treasury allowed mass deferrals of income tax and VAT during lockdown. It also halted debt-collection activity against people who already owed it money.

Up to 2.4 million more taxpayers now owe HMRC money following the pandemic, a rise from 3.8 million on January 31, 2020 to 6.2 million on September 30 this year. The average amount owed has increased by 60 per cent from GBP4,300 to GBP6,800.

In addition, the amount owed by those who already held debts before the pandemic began has risen from GBP2.5 billion in 2019-20 to GBP4.4 billion in 2020-21, the audit office found.

It also found that HMRC had slashed the number of staff in its debt management team by 18 per cent because of efficiency drives between March 2014 and March 2020.

Meanwhile, the taxman’s plans to recruit staff in the next year are insufficient to deal with the problem, the NAO judges. HMRC intends to recruit 1,000 full-time staff in 2021-22. However, the watchdog said this would do no more than address current worker shortages, and not give it the additional firepower it needs. Gareth Davies, head of the NAO, said: “Some debtors have already been able to repay their tax debt quickly — but an unknown number of taxpayers have been badly affected and will struggle to do so. HMRC needs to significantly increase its capacity if it is to meet the changed scale and nature of the challenge.”

The report comes after an investigation in The Sunday Times last week found systematic problems at HMRC’s customer service department, with workers being wrongly threatened by debt collectors while others had to wait for months for thousands of pounds they are owed in refunds.

An HMRC spokesman said it had supported businesses and individuals throughout the pandemic, adding: “The debt balance is reducing as the economy recovers and we re-engage with customers to understand their circumstances and agree Time to Pay arrangements where appropriate — and we expect it to fall further.”

Read more:
HMRC ill equipped to hunt for billions owed in lockdown resurgence

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

Latest

News

Follow us on Spotify BusinessWorld B-Side The Filipino workforce is gradually adapting to a work environment that has been changed forever due to the pandemic....

News

The Department of Environment and Natural Resources (DENR) has given recognition to volunteers and partners who had significant contribution to the cleanup and rehabilitation...

News

Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their stories...

News

Former client, Jennifer Pacquing on her experience with Planning for Canada services. Planning for Canada – Planifier pour le Canada (PfC) is pleased to...

News

Windmills are seen in Pililia, Teresa, Rizal province on April 25. — PHILIPPINE STAR/ MICHAEL VARCAS THE INCOMING Marcos administration should consider the full...

News

THE PHILIPPINE central bank should deliver more aggressive rate hikes in order to curb inflation that is now expected to reach 5% this year,...

You May Also Like

News

BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...

News

REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...

News

COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...

Financial Advisors

The healthcare ecosystem is one that has thrived on the cusp of scientific progress, benefitting enormously from the winds of change in the technological...

Disclaimer: Respect Investment.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.