NAO report has flagged an HMRC shortfall of 300 debt management staff to recover the £42bn owed by 6.2m taxpayers in debt as of 30 September 2021.

The NAO reports that total tax debt increased from £16bn in January 2020 to £67bn in August 2020, before falling to £42bn in September 2021 – more than double the level going into the pandemic.

 

A significant amount of the increase was driven by the government deciding to allow taxpayers to defer VAT and self assessment payments as part of its overall response to the pandemic.

 

The figures also reflect a change in debt management approach in the early stages of the pandemic, with HMRC pausing debt collection activity, moving staff over to helping businesses and individuals apply for furlough payments, and extending access to online repayment tools allowing taxpayers to schedule tax payments over longer periods.

 

Many of the payments deferred from last year have now been settled, bringing the amount of tax debt down from its peak without much effort from HMRC.

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