HMRC admits it will never recover £19bn of unpaid tax

HM Revenue & Customs (HMRC) has acknowledged that it is unlikely to recover over £19 billion of the £43 billion owed in unpaid taxes, a figure that has surged to three times the levels seen before the pandemic. The department's annual report reveals a troubling trend, with the proportion of unpaid taxes expected to remain uncollected rising to 45% last year, up from 32% the previous year. This increase is attributed to a significant backlog of older debts and the ongoing economic difficulties faced by both businesses and individuals. The report highlights that the challenges in tax collection are exacerbated by the current economic climate, which has had a profound impact on taxpayers. As a result, HMRC is struggling to maintain its previous levels of tax collection, leading to concerns about the sustainability of public finances. The department's ability to manage and recover these debts is further complicated by the rising number of taxpayers experiencing difficulties in reaching HMRC for assistance. In a related issue, the number of taxpayers who have been cut off after waiting more than an hour on the phone has increased sevenfold, indicating a growing frustration among the public in accessing support. This situation raises questions about HMRC's capacity to effectively handle the increasing volume of inquiries and the implications for tax compliance. As the government grapples with these challenges, the rising tax debt poses significant implications for fiscal policy and public services, highlighting the urgent need for effective strategies to address the growing tax collection crisis.