HMRC is ramping up efforts to recover £6.5 billion in unpaid taxes by hiring 5,000 new inspectors to target small businesses across the UK
London: So, it looks like HMRC is stepping up its game. They’re planning to hire 5,000 new tax inspectors to chase down £6.5 billion in unpaid taxes. This news just came out in their latest report.
According to some data from Price Bailey, a lot more compliance staff have been added over the last few years. They say it’s about a 26% increase! That means there’ll be one extra inspector for every 1,000 small businesses in the UK. That’s a big deal!
This shift is all about focusing on the 5.3 million small businesses and sole traders out there. MPs have been pretty vocal about HMRC’s customer service issues lately, saying it’s not up to scratch.
In fact, the Public Accounts Committee found that HMRC left 44,000 customers hanging on the phone for ages, only to disconnect them after a long wait. They also pointed out that HMRC wrote off £5 billion in unpaid taxes instead of going after that money.
MPs are pushing HMRC to do better at collecting unpaid taxes and to help those who struggle with online tax returns. There’s a lot of chatter about how HMRC has let tax evasion slide, which isn’t great for public trust.
Last year, HMRC collected around £1,100 billion in taxes, but they’ve been criticized for not doing enough to recover older debts. They’ve also been accused of underestimating how much tax is being hidden in offshore accounts.
With more people becoming taxpayers, MPs are urging HMRC to come up with a solid plan to collect old debts before they become impossible to recover.
In the last fiscal year, HMRC wrote off £5 billion in debts, which is a jump from the previous year. They’re worried that a huge chunk of total debt could go uncollected. The committee thinks HMRC’s estimate of £0.3 billion lost to overseas tax evasion is way too low.
Since the report, HMRC has received extra funding to hire 1,500 more staff to improve customer service. But there are concerns that if demand keeps rising, they might struggle again.
They’ve been told to use their enforcement powers more effectively. There were only 344 criminal prosecutions last year, which is a drop from previous years.
Some folks are worried that HMRC isn’t using the tools they have to tackle tax evasion. In response, Jim Harra from HMRC said the committee’s claims are off base. He insists they’ve made big improvements, like reducing call wait times.
Harra also mentioned that over 80% of customers are happy with their digital services, which is good to hear. It seems like HMRC is trying to get a handle on this unpaid tax situation.
