HMRC write off £5 billion in uncollected tax
Uh-oh. Those glorious swine at HMRC have been doing their accounts and, for 2011/12, it transpired that it overpaid around £2-£2.5 billion in tax credits and underpaid up to £290 million as a result of fraud and error, according to a report by a National Audit Office.
Taxes totalling almost £5.2 billion were written off. The report found there had been an increase in taxes which HMRC has decided not to pursue, which includes £756 million worth of income tax in 2011/12 alone.
House of Commons Public Accounts Committee chair, Margaret Hodge, said she was shocked by ''the sheer scale of waste and mismanagement'' at HMRC.
Ms Hodge said: ''Sadly it is no surprise that the NAO has found substantial problems with the HMRC's accounts. This year has seen a litany of tax errors and scandals come to light with mistakes made at the most senior level from the permanent secretary for tax downwards.
''The sheer scale of waste and mismanagement at HMRC never ceases to shock me. Without even mentioning the tax gap, in 2011/12 the department wrote off a staggering £5.2 billion of tax owed, overpaid nearly £2.5 billion in tax credits due to fraud and error and underpaid around £290 million... With its long history of large scale IT failures, the department needs to get a grip before it introduces its new real-time PAYE information systems and begins the high-risk move from tax credits to the universal credit.''
An HMRC spokesman said: "HMRC has collected £474.2 billion in tax revenues this year - the highest-ever total. We have increased our tax take by £4.5 billion against a very challenging economic backdrop. The £5.2 billion debt written-off figure relates to irrecoverable debt, where there is no practical way to pursue the liability"