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Mps Lambast Revenue Over Rise In Cases Of Unpaid Tax

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http://www.timesonline.co.uk/tol/money/tax...icle6458973.ece

The tax authorities must crack down on late payers, a powerful committee of MPs will say today in criticising HM Revenue and Customs (HMRC) for the enormous sums owed by businesses and individuals.

Nearly one person in three pays taxes late, according to the report from the Public Accounts Committee (PAC), which condemns HMRC for failing to collect billions in tax.

About £17 billion was owed to HMRC in taxes, interest and fines at the end of March 2008, with £4.5 billion outstanding for more than a year. The number of cases of unpaid taxes rose by nearly a quarter in 2007-08.

The committee lambasts HMRC for being slow to use techniques used by other government departments to manage their debts. It highlights the antiquated computer systems that do not allow the Revenue to determine if those failing to pay one type of tax on time are late in paying other taxes.

The Revenue “does not follow good practice in measuring the amount of debt collected within 30 or 90 daysâ€, the committee’s report says.

The damning report echoes the criticisms levelled by the National Audit Office late last year, which said that HMRC had failed to meet its targets to cut the amount of uncollected tax.

Burgeoning tax debts will come as a further blow to the Government, which is already feeling the pain as overall tax receipts drop because of the economic slump. Income tax receipts fell by nearly 14 per cent in April, while the income from corporation tax fell by more than a quarter, official figures show.

Edward Leigh, the chairman of the Public Accounts Committee, said: “The department must try every means it can to tackle what is likely to become a growing problem of tax debt, while making allowance for people and businesses in temporary financial difficulty.â€

More than 141,000 businesses have been allowed to defer paying their taxes under the “Business Payment support system†since November last year. The scheme puts further pressure on HMRC to chase taxpayers who can afford to pay their taxes on time.

An HMRC spokesman said that the report did not reflect current HMRC debt activity. “Things have moved quickly since last year and HMRC has made even further progress since the PAC held its hearing and the detailed NAO report. We have reduced the amount of tax debt as a proportion of net tax receipts on most taxes,†he said.

As these figures are a year old would it be fair to assume that since then these numbers will have got worse? Some businesses and individuals will have gone bankrupt?

Have the numbers deferring payment increased?

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About £17 billion was owed to HMRC in taxes, interest and fines at the end of March 2008, with £4.5 billion outstanding for more than a year. The number of cases of unpaid taxes rose by nearly a quarter in 2007-08.

Surely the amount owed to the HMRC is a matter of opinion, for the courts to decide?

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About £17 billion was owed to HMRC in taxes, interest and fines at the end of March 2008, with £4.5 billion outstanding for more than a year. The number of cases of unpaid taxes rose by nearly a quarter in 2007-08.

Surely the amount owed to the HMRC is a matter of opinion, for the courts to decide?

Sadly not, they issue an assessment of how much they think you owe and it's then up to you to prove otherwise. They can easily afford and have the stamina for epic legal battles, you may not have. Habeas corpus is out the window where HMRC are concerned.

_________

This will last until they realise that by chasing the tax HMRC are forcing businesses to the wall and sending the benefits bill through the roof. Where a business is wound up, in many cases, the winding up petition will be brought by HMRC.

In the febrile days of sutumn last year HMRC agreed soft repayment deals on tax. These deals were taken up by a very large percentage of UK businesses. Most of this money will prove to be uncollectible.

A big problem with tax is that it's so byzantine to calculate and is done massively in arrears. Businesses that are having tough times find they are having to find the money from cashflow to pay tax bills for the good times. Noddy-know-all armchair businessman types will say 'well they should have put money aside', but this is much easier said than done.

Next January will see the returns for the 2008 tax year go in and the government will discover the full horror of just how bankrupt the country is, when it sees a massive fall in revenues. Not only a massive fall, many of the payments on account will have been far too big and the exchequer may find a net negative cashflow.

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Sadly not, they issue an assessment of how much they think you owe and it's then up to you to prove otherwise. They can easily afford and have the stamina for epic legal battles, you may not have. Habeas corpus is out the window where HMRC are concerned.

_________

This will last until they realise that by chasing the tax HMRC are forcing businesses to the wall and sending the benefits bill through the roof. Where a business is wound up, in many cases, the winding up petition will be brought by HMRC.

In the febrile days of sutumn last year HMRC agreed soft repayment deals on tax. These deals were taken up by a very large percentage of UK businesses. Most of this money will prove to be uncollectible.

A big problem with tax is that it's so byzantine to calculate and is done massively in arrears. Businesses that are having tough times find they are having to find the money from cashflow to pay tax bills for the good times. Noddy-know-all armchair businessman types will say 'well they should have put money aside', but this is much easier said than done.

Next January will see the returns for the 2008 tax year go in and the government will discover the full horror of just how bankrupt the country is, when it sees a massive fall in revenues. Not only a massive fall, many of the payments on account will have been far too big and the exchequer may find a net negative cashflow.

Pretty soon there will be too many people to lock up, how long do the debts stay on the books, anyone?

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Pretty soon there will be too many people to lock up, how long do the debts stay on the books, anyone?

Pretty sure it's six years, which used to be the norm. However, in areas where there's the possibilty of mass debt default such as student loans, they have been excluded from bankruptcy (previously only debts such as court fines were) and I don't think they get written off for twenty odd years.

I can see quite a lot of student loans being defaulted on by women marrying and then never working enough to reach the salary threshold for repayment. Despite the rule change a lot of student loan debt will still become as worthless as third world debt. Nationwide bought a load of it of the govt, I think, BTW.

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