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HMRC Defends Debt Collection Policies

The CEO of Her Majesties Revenue & Customs (HMRC) that debt collection for debts under £10,000 is no longer a top priority for the taxman.

At a recent Treasury Committee meeting covering the Governments operational efficiency programme, Lesley Strathie confirmed that although HMRC will “never give up” on smaller debts, the lower sums were no longer considered a top priority.

“In terms of debt management, our priority is debts of more than £10,000,” she said.

Having come about after the Public and Commercial Services Union (PCS) raised concerns over whether a series of redundancies was impacting on the department’s capacity to retrieve the outstanding £25.8bn tax debt thought to exist, Strathie confirmed that the staff losses had resulted in a revision of debt collection and that staff were being redeployed into debt management.

Some estimates indicate the number of tax collectors within HMRC has dropped by 500 in the past year alone.

According to Peter Lockhart, senior national officer of the PCS, the 18,000 staff shed by HMRC since 2004 as part of an efficiency programme has meant the department has ‘not been able to focus on debts of less than £10,000’.

He said an additional 7,000 staff cuts planned over the next two years will further hinder debt collection.

‘Whether there’s a direct correlation between debt collection priority and staff cuts seems to be counter intuitive when there’s plans to cut more,’ he said