MPs are not confident in HMRC’s ability to pull back tax debt

Covid-19 has ‘changed the nature and scale of tax debt’ with an ‘enormous task’ for HMRC to bring tax debt back from the current ‘mountain’ of £39bn to the pre-pandemic level of £16bn according to the House of Commons’ Public Accounts Committee. In a new report HMRC’s management of tax debt MPs say HMRC will need to strike a difficult balance to achieve this without harming the economic recovery.

The committee is concerned about rogue firms that have exploited the ‘temporary restrictions on insolvency action and the availability of Covid support grants and loans to embezzle large sums during the pandemic’.

The report states HMRC does not know how long it is likely to take to reduce the debt balance to pre-pandemic levels nor does it have a clear plan or timescale to show it can manage this challenge. Further the...