subject: Hmrc Under Fire Over Income Tax Cases Backlog [print this page] 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 Comptroller 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. HMRCs 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 HMRCs 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 HMRCs ability to monitor and assess the targeting and performance of debt collection campaigns and to design future interventions in the areas of greatest risk.
