Gavin Hinks, Accountancy Age, Wednesday 21 July 2010 at 08:29:00

HMRC battling to resolve over and underpaid tax cases

The taxman is struggling with 18 million cases of overpaid and underpaid taxamounting to taxpayers contributing 3bn more than they should done.

A report on HM Revenue & Customs from theNationalAudit Office said: "The exact amounts of tax over and underpaid and thenumber of individuals affected cannot be determined until these cases areresolved. Reducing this backlog of cases remains a very significant challenge."

Commenting directly NAO chief Amyas Morse said: "The department has not madeenough progress in reducing the backlog of 18.2 million income tax cases wherethere is potentially overpaid or underpaid tax. It also needs to improve itscollection rate for tax credits debts, which substantially lower than that fortax debts."

More also said HMRC needed to develop its information systems needed to bedeveloped to properly monitor the success of its campaigns targeting thecollection of specific taxes.

He said HMRC had been affected by the recession which had increased the valueof tax debt to be recovered while at the same time coming under pressure tostreamline because cost cutting.

2009-10 saw HMRC collect 435.1bn, down 1.3% on 2008-09. Amounts due, but notyet paid stood at 26.1bn.

Read more:

NationalAudit Offcie Report and HMRC

"Dash for cash" sees HMRC prefer negotiation over litigation