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Loss Of £4.6bn In 'irrecoverable' Tax Draws Scorn

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http://www.independent.co.uk/news/business...rn-1762128.html

The Government's policy of writing off almost £4.6bn in unpaid taxes, in a year that has seen its tax take spiral because of the downturn, has been branded 'ridiculous" by a leading chartered accountant.

The Inland Revenue published its accounts for the year to the end of March last week, which showed the total tax take had fallen £22bn. Of that, the Government wrote off £4.1bn mainly in value added tax, as well as National Insurance contributions and corporation tax, last year because it is not practical to track the money down.

Angela Beech, the head of personal tax at Blick Rothenberg, said: "That is a lot of money that the revenue hasn't bothered collecting. It just seems ridiculous." The Government said the write-offs were debts considered "irrecoverable because there is no practical means for pursuing the liability".

Remissions hit £386m, mainly through tax credits. The Government describes remissions as "debts capable of recovery but HMRC has decided not to pursue the liability, for example, on the grounds of value for money or official error".

An HMRC spokesman said: "We collect almost all tax debt and write offs are relatively low. Our accounts show that in 2008-09 we only wrote off 1 per cent of total revenue and around 90 per cent of that was due to insolvency. HMRC can, does and will continue to pursue those who won't pay when they have the means to do so." The amount of corporation tax written off rose from £374m in the year to March 2008 to £596m, which Ms Beech speculated could be companies collapsing. She was also angered by HMRC's policy of putting aside £140m to top up benefits for staff opting to retire early. Ms Beech said: "The early retirement cost isn't living in the real world. Other companies don't have the luxury."

If it's not practical to track the money down, if that's the case how do they know it exist in the first place?

I wonder what spin the govt will come up with for this.

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Guest BoomBoomCrash

These debts wouldn't by any chance by owed by significant contributors to labour party coffers would they?

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http://www.independent.co.uk/news/business...rn-1762128.html

If it's not practical to track the money down, if that's the case how do they know it exist in the first place?

I wonder what spin the govt will come up with for this.

It seems to suggest that this figure includes amounts irrecoverable due to insovency. If that's the case then these figures are very low. Given HMRC has allowed firms 'time to pay' arrangements as a response to the recession, in some cases arrears stretching back 12 months, surely at some point the write off figures are likely to explode.

For many buisinesses, I'd have thought they'd only have to miss 2-3 quarters of VAT for the debt to be insurmoutably large. Couple this with the reversion to 17.5% later on it all seems a recipe for disaster.

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This is why i doubt we'll see much action on mortgage fraud, the govt rewards irresponsibility.

Actually, for the past 10 years id consider anyone doing anything to not pay taxes to these fascists is fulfilling a patriotic duty

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This is why i doubt we'll see much action on mortgage fraud, the govt rewards irresponsibility.

Actually, for the past 10 years id consider anyone doing anything to not pay taxes to these fascists is fulfilling a patriotic duty

Yes, paying taxes is incitement to government economic mismanagement.

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This is why i doubt we'll see much action on mortgage fraud, the govt rewards irresponsibility.

Actually, for the past 10 years id consider anyone doing anything to not pay taxes to these fascists is fulfilling a patriotic duty

How much did you reclaim from the bastards last year? How much will you reclaim this year?

If those figures fall more than a few quid short of what they take from you in PAYE, start planning now for how to remedy that. Pensions, VCTs, EISs, charitable donations. If necessary, get an overdraft or personal loan in March to buy investments, to pay off in May when you get the rebate (or shoot for April if you're really well organised).

I shall regard this year as a failure if my rebate exceeds my PAYE by more than £1k+NI, on an income of which the majority is taxed at over 50%.

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If you owe £10 in tax, they'll track you down. If you owe £10,000 in tax, they'll track you down. But if you owe £10million in tax, they'll write it off.

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Angela Beech, the head of personal tax at Blick Rothenberg, said: "That is a lot of money that the revenue hasn't bothered collecting. It just seems ridiculous." The Government said the write-offs were debts considered "irrecoverable because there is no practical means for pursuing the liability".

What a perfectly ridiculous comment, and a head of personal tax clearly knows better so she's just saying it for the cheap tabloid style headline.

What does she want HMRC to do? Announce that it's ignoring the fact that companies have gone under and try and collect the tax and VAT from Woolworths etc anyway?

Edited by mikeymadman

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