UK Tax Debt Rises

Tue, 09 Jun 2009

The Public Accounts Committee has revealed that the level of tax debt has increased by over 20 per cent in the UK in the space of a year. As of March 31st 2008, the latest date from when figures are available, public tax debts has risen by 22 per cent to £17.3 billion on the previous year, comprised of unpaid taxes, penalties and interest.

The Committee’s report called for Her Majesty’s Revenue and Customs (HMRC) to be understanding of people and businesses in temporary financial difficulties as a result of the credit crunch . Chairman of the Committee, Edward Leigh, criticised HMRC for being slow in adopting the latest techniques to help manage debt . Whilst they have begun offering taxpayers more methods of payment, including credit cards and direct debits, Leigh believed that new developments in payment technology could help whilst the 9 to 5 collection hours are not always conducive to tracking down debtors.

One of the difficulties faced by HMRC is that it does not have an IT system linking all the tax records of an individual, as it cannot afford it. This means that it can’t trace the different debts of an individual, ranging from personal loans, credit cards and several other forms of credit.
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