Overpaid tax could run to £3bn

HM Revenue & Customs

The taxman is struggling with 18 million cases of overpaid and underpaid tax amounting to taxpayers contributing £3bn more than they should done.

A report on HM Revenue & Customs from the National Audit Office said: "The exact amounts of tax over and underpaid and the number of individuals affected cannot be determined until these cases are resolved. Reducing this backlog of cases remains a very significant challenge."

Commenting directly NAO chief Amyas Morse said: "The department has not made enough progress in reducing the backlog of 18.2 million income tax cases where there is potentially overpaid or underpaid tax. It also needs to improve its collection rate for tax credits debts, which substantially lower than that for tax debts."

More also said HMRC needed to develop its information systems needed to be developed to properly monitor the success of its campaigns targeting the collection of specific taxes.

He said HMRC had been affected by the recession which had increased the value of tax debt to be recovered while at the same time coming under pressure to streamline because cost cutting.

2009-10 saw HMRC collect £435.1bn, down 1.3% on 2008-09. Amounts due, but not yet paid stood at £26.1bn.

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