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HMRC struggles to collect ageing tax debts as millions of taxpayers fall behind on bills

HMRC struggles to collect ageing tax debts as millions of taxpayers fall behind on bills

Tax debt more than a year old and outside any repayment arrangement has surged from £5.3bn before the pandemic to £18.6bn. The National Audit Office warns that HMRC is increasingly struggling with debtors who refuse to engage at all. More than half the total balance is now over a year old, compared with 28% in 2019-20. Before Covid, the overall tax debt figure stood at around £15bn.

HMRC processed £103.6bn of new tax debt in 2025-26, twice the pre-pandemic average.

HMRC estimates its compliance drive since 2021 generated £10.7bn in additional revenue at a cost of £368m.

Nearly half of all new tax debt arising in 2025-26 is cleared within a month, much of it comprising bills that taxpayers had simply overlooked.

MoreThe IndependentHMRC dealing with older tax debts which are harder to collect – report - The IndependentEvening StandardHMRC dealing with older tax debts which are harder to collect – reportCredit ConnectHMRC making progress on tackling tax debt - Credit ConnectHackney GazetteHMRC faces £43.8billion tax debt crisis as millions struggleNational Audit Office (NAO)HMRC’s management of tax debt - National Audit Office (NAO)
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