TAX debt is now more than double pre-pandemic levels with the National Audit Office (NAO) today warning the HMRC may struggle in dealing with the workload of collection.
Up to 2.4 million taxpayers are thought to be in debt to HMRC since the pandemic with a total debt of £42billion in September according to the NAO.
As the UK went into lockdown HMRC paused most of its debt collection activity as well as changing the tone of communications and speed with which it tried to collect debt.
Payments of VAT and Self Assessment income tax were also deferred in a bid to help businesses and individuals.
The suspension of debt collection combined with the economic impacts of the pandemics on businesses and household finances though means outstanding debt grew to the highest levels in a decade.
HMRC has said it will prioritise chasing debts based on the likely impact of the pandemic on the individual’s ability to pay.
However the NAO has warned those whose ability to pay was judged least impacted by the pandemic often have the largest debts.
The average amount owed now stands at £6,800.
The NAO has said the taxman will need to strike a balance of pursuing the debt whilst still allowing taxpayers time to recover their finances.