HMRC unveiled figures today showing an increase in unpaid tax, with the total reaching £44.5bn as of 30 June 2023. This marks a 6% growth in tax debt compared to last year on the same date ...
At the close of June 2023, 892,673 taxpayers were involved in Time to Pay (TTP) agreements, a 5% increase from last year, though slightly below the 912,233 recorded at the end of March 2023.
The strain on cashflow is mirrored in a surge in business insolvencies. The latest numbers, for the quarter ending 30 June 2023, show the most significant tally of company insolvencies in nearly a decade and a half.
HMRC's performance statistics also reveal an uptick in civil compliance checks against taxpayers, with 77,000 new investigations in Q1 of 2023-24, marking a 28% increase year-on-year as post-pandemic compliance work intensifies.
I feel that these figures reveal a grim scenario for small businesses in the present economic climate. Those failing to pay on time could face escalating interest rates for overdue payments, currently at a 15-year peak of 7.5%, especially with the Bank of England's recent decision to elevate base rates.
HMRC has simplified the process for taxpayers with income tax, PAYE, and VAT debts to initiate Time to Pay arrangements via online tools. Expanding this to cover corporation tax and enhancing the monetary thresholds for self-arranged TTPs would be beneficial.
Nevertheless, HMRC must also confront those who can afford to pay, but are not doing so. The task ahead for HMRC is enormous.
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