Another gem from the House of Commons Public Accounts Committee report on H M Revenue & Customs:
The Department has been less successful in dealing with Tax Credits debt. The debts are often small, making them resource intensive to pursue, although where the Department can recover debts from ongoing awards, this is more successful.62 The Department told us that it is on track to achieve its target of reducing the Tax Credits debt balance by £200 million to £4.3 billion by March 2011, although this will be partly achieved by writing off £461 million of uncollectible debt.
So that's all right then. Problem solved! If everything was so easy.
But still people doubt there's a tax gap.
And still the government insists on sacking HMRC staff who could solve this problem.
If debt is uncollectible then the sensible thing is to write it off. Are you suggesting we spend more money than we will collect harrasing mainly poorer parents to collect what are small sums to you but large ones to them?
Tax credits have an amazingly complex application form that even educated professionals who have lots of experience with HRMC forms have difficulty completing. It is hardly surprising mistakes are made and unless fraud is involved it is both uneconomic and unethical to persue people for genuine errors. Writing the debt off is the solution unless you want the budget balanced on the backs of the poor.
So the ACTUAL debt is going up by £261m? If HMRC was a business it really would have gone bust by now
@DevonChap
That logic is fine
But it’s not the reason they gave for the write off
I highlighted the reasoning given
It IS the reasons they gave for the w/off – that it was uneconomic.
@Maurice
But they claimed it helped them meet their target
We can all meet targets that way
That’s my point
Out of curiostiy, does anyone know if HMRC allowed to sell uncollected receiveables to commercial collectors? In any event, one would expect that HMRC will have sought to evaluate the market value of its uncollected claimes, and would have only written them off if the market was valuing them at nil.
The irony is that the headline is saying one thing but the facts say anther. Even by writing off £461M they can only reduce the balance by £200M.
@Million Dollar Babe
Yet again you show how blisteringly stupid you are. Of course HMRC did not consider the commercial value of this debt, or the equivalent market worth that it my claim if it was sold at second-hand discounted rate. The truth is that much of this debt will be disputed, and there is no way on earth that this debt can in that circumstance be assigned to a market collector. That is the precise reason why getting rid of staff from HM Revenue and Customs makes no sense at all. There is no market substitute for having people on the job at the desk in HM Revenue and Customs