Following the UK’s Spring Budget announcement, HMRC was given an extra £140m in funding for its debt management capability, which is projected to bring in an extra £4.3bn in unpaid tax by March 2029.

HMRC data shows that delinquent tax debts – those not agreed with HMRC – stood at £39.1bn at the end of 2023.

Commenting on the extra funding, Pinsent Masons head of tax disputes and investigations, Steven Porter, said: “The new funding for HMRC’s debt management function might actually be good news for taxpayers. If it results in more people dealing with taxpayers in debt, it will help with one of the biggest problems people have with HMRC – being unable to speak to anyone on the phone.

“Getting a ‘Time to Pay’ arrangement if you have tax debt is now much more difficult than it was, simply because talking to someone at HMRC about your debt is now a major challenge.

“It’s much better – and cheaper – for HMRC to get these debts rescheduled and repaid, rather than end up chasing them through debt collectors and investigations.”

HMRC data also shows the amount of tax debt that is managed under a ‘Time to Pay’ arrangement or similar fell 16% in the year to December 31 2023, declining from £7.8bn to £6.6bn.

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