Why isn’t HM Revenue & Customs monitoring its debts?

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HM Revenue & Customs’ accounts continue to bemuse me.

I mentioned some of its strategic objectives yesterday, and the baffling assessment it has offered with regard to them. So let’s take another one, this being objective 3 against DSO 1 (to understand the jargon, go here). DSOI 1 says HMRC must:

Improve the extent to which individuals and businesses pay the amount of tax due and receive the credits and payments to which they are entitled

And objective 3 says:

3. Protect tax revenues by reducing the proportion of tax debts remaining by: 8per cent at 30 days and 13 per cent at 90 days compared with 2008-09.

The statement of achievement for 2009-10 says:

HMRC is not due to begin reporting on this target until 2010-11. Debts becoming collectible in April 2010 will not be 30 days old until after end May 2010. We began the analysis for the first 30 day roll rate report for 2010-11 in mid June; the report is expected to be published later this month. The target will be baselined against 2008-09 data.

Now any reasonable interpretation of that suggests that it really is true that HMRC’s dent control was so bad that at 5 April 2010 they could not age their ledger. If true that’s horribly and appallingly mismanaged debt.

No wonder the tax gap is growing.

So here are some questions that need answering:

  1. HMRC has said it is not managing the age profile of its debt until the financial year 2010-11, starting in April 2010. Can the latest age profile of its debt, in total and by tax, be published so that the quantum of its debt and its likely recoverability can be assessed?
  2. What proactive steps is HMRC taking to recover its overdue debts?
  3. How has the management of HMRC’s debt changed since it has been able to age profile its debtors? has there been any increase in debt recovery as a result?