| The head of the National
Audit Office has criticised HM Revenue &
Customs (HMRC) for failing to make enough
progress in reducing a backlog of 18.2
million cases where there is potentially
overpaid or underpaid income tax. The
report on the 2009-2010 accounts of HMRC,
issued by Amyas Morse, the Controller and
Auditor General on 20 July, reveals that
total revenues from taxes and duties were
£435.1 billion, down by £5.9 billion on
2008-09.
HMRC improved its performance in
collecting debt, with amounts due from
taxpayers but not yet paid decreasing by
£1.6 billion to £26.1 billion but progress
has been slow in reducing the backlog of
cases of potentially overpaid or underpaid
tax from 2007-08 and earlier.
At 31 March 2010, 18.2 million cases
were awaiting action. HMRC’s early
analysis suggests that around half of
these are likely to involve an over or
underpayment of tax and these may lead to
repayments and recoveries of the order of
an estimated £3 billion and £1.4 billion
respectively.
At 31 March 2010, tax credits debt had
increased to £4.5 billion (£4.4 billion at
31 March 2009), partly because claimants
face financial difficulties and cannot pay
and partly because HMRC has prioritised
collecting higher value tax debts.
Amyas Morse said: "The Department has
not made enough progress in reducing the
backlog of 18.2 million income tax cases
where there is potentially overpaid or
underpaid tax. It also needs to improve
its collection rate for tax credits debt,
which is substantially lower than that for
tax debts.”
He said that HMRC’s administration of
tax in 2009-2010 had been influenced by
the recession, pressure on HMRC to
streamline processes and the effectiveness
of its information systems. These needed
to be developed so they improve HMRC’s
ability to monitor and assess the
targeting and performance of debt
collection campaigns and to design future
interventions in the areas of greatest
risk.
LINKS: Full
report |
