The National Audit Office has issued a damming report which estimates as many as 1.5 million working adults had a personal or business tax debt in April this year - a rise of 22% over the past 12 months.

The report also details concerns that HMRevenue and Customs does not have the resources to deal with the increase, having cut staff handling debt by 14% to 6200 since 2006, according to guardian.co.uk

Edward Leigh, chairman of the Commons public accounts committee, said HMRC has failed to adopt necessary practices in managing debts owed.

'If the department had introduced such measures, then it would be better placed to tackle what will surely become a more pressing problem in the present economic climate.

'It is difficult not to ask some fundamental questions. How will HMRC manage what is very likely to be a growing volume of tax debt? How will the department maintain the flow of money to the exchequer? And how will HMRC identify and support those poor and vulnerable people owing tax who need time to pay?' he said.

Further Reading:

NAO rebukes Customs for audits

HMRC plans most far-reaching clampdown yet