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Revenue and Customs

Volume 508: debated on Thursday 8 April 2010

To ask the Chancellor of the Exchequer if he will publish the remissions and write-offs included in the HM Revenue and Customs Trust Statement (a) 2007-08 and (b) 2008-09 including (i) the amounts not collected and (ii) the reasons for the remissions and write-offs. (325747)

The information is as follows:

(i) Table 8.2 on page 100 of HM Revenue and Customs' (HMRC) 2008-09 Annual Accounts sets out the amounts of revenue that HMRC remitted and wrote off in 2007-08 and 2008-09. HMRC's Annual Accounts are available at:

(ii) Tax debts are remitted where they are capable of being recovered but HMRC decides not to pursue a liability. It does this: when the value of a debt is small compared with the likely cost of recovering it; when enforcing payment would cause an individual, or his or her dependents, to suffer financial hardship; or where an earlier error by HMRC would make it inappropriate or unfair for it to enforce payment.

HMRC writes off debts when they have become irrecoverable because there are no practical means for pursuing the debt. This applies where taxpayers have gone missing and HMRC has not been able to trace their current whereabouts or where they have moved overseas to a territory outside the European Union with which the UK has no reciprocal recovery rights.

Debts are also written off where individuals or companies have become insolvent. When this happens, HMRC aims to recover a proportion of what it is owed consistent with its legal rights as a creditor, and it writes off the tax that cannot be recovered in this way. Around 90 per cent. of all HMRC remissions and write offs come from this last category.