COMMONS

Managing debt owed to central government

Inquiry status: government response published

Background

Individuals and businesses are in debt to government for overdue tax liabilities, benefit or tax credits overpayments and other reasons, including outstanding fines and court confiscation orders. Overdue debt identified by government was at least £22 billion at March 2013, against total collected revenue of over £600 billion in 2012-13. More than two-thirds of the debt was owed to HMRC.  £6 billion of debt was written off in 2012-13 as irrecoverable, or ‘remitted’ on the basis that it was not a good use of scarce resources to pursue it. In total, losses were more than £32 billion over the last five years. Government cannot easily control all losses - around 70 per cent result from write-offs in insolvency cases. Since 2011 the Fraud, Error and Debt Taskforce, an expert panel chaired by the Minister for the Cabinet Office, has been developing a cross-government view of debt management.

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