The level of tax debt owed to HMRC rose by 22% year-on-year to reach £48.1 billion at the end of 2022.
The total debt is made up of £7.8 billion of managed debt in repayment arrangements and £40.3 billion in debt available for HMRC to chase.
Fewer TTP arrangements but managed debt still up 88%
Whilst the number of taxpayers in time to pay (TTP) arrangements fell by 14% compared with the previous year, to 730,617 at the end of December 2022, the actual level of managed debt rose considerably by 88% to £7.8 billion, up from £4.1 billion at the end of December 2021.
HMRC to focus on debt collection
The debt available for pursuit by HMRC climbed 24% to £40.3 billion, up from £32.5 billion at the end of 2021.
£715.5 billion taxes were collected by HMRC in 2021 to 2022, an increase of 22.5% from the year before when the pandemic affected revenues. HMRC says that it is further increasing resources focused on debt collection.
What is compliance yield?
Compliance yield is one of HMRC’s main performance measures and it refers to the estimate of the additional revenues that HMRC considers it has generated and the revenue losses it has prevented.
According to HMRC, so far this financial year, the overall compliance yield is £18.6 billion, compared to £17.4 billion at the same point last financial year. This indicates that HMRC are on course to protect more compliance yield in 2022 to 2023 than in either of the previous two years.
Get in touch if you are worried about your tax debt
The levels of tax owed to HMRC are eyewatering and are around 50% higher than the pre-pandemic average – HMRC have confirmed that the majority of this debt is sitting with SMEs who continue to face challenging economic conditions.
If you are worried about your tax debts or in financial distress you should seek professional advice as soon as possible – early intervention is vital to survival. Restructuring assistance is available and possible but timing and planning are key.
Get in touch now and our experienced team can work with you to look at what options are available.
Disclaimer
The information was correct at time of publishing but may now be out of date.
