Lib Dems Accuse Inland Revenue Of 'Gross Incompetence' Concerning Unpaid Debt

by Jason Gorringe, Tax-News.com, London

14 May 2004

The UK's Inland Revenue is continuing to attract criticism for the £14 billion in unpaid tax debts highlighted by a National Audit Office report in March, this time from the Liberal Democrats, who have accused the department of “gross incompetence”.

The attack came from Lord Oakeshott of Seagrove Bay, the party’s Treasury spokesman in the House of Lords, after he learnt last week that the Revenue could not break down or itemise the various debts owed to it.

According to The Times, Lord Oakeshott observed that:

“The first lesson you learn in business is to know who owes you money and how long the debt has been outstanding. How can the Government justify not having this information?”

In addition to the $14 billion in outstanding taxes, the NAO report also revealed that in the year to October 2002, the Revenue wrote off tax and other miscellaneous duties of over £500 million, and that in the year to March 2003, £275 million was written off in respect of National Insurance contributions which were no longer recoverable.

Over £575 million of this was written off as a result of business failure or insolvency.

In defence of the tax department, an Inland Revenue spokesman was quoted by The Times as suggesting that the £14 billion owing represented only a random “snapshot” of outstanding debt.

“This not a measure of annual debts owed to the Revenue. It is just a snapshot of the debts owing at some random point in the year, most of which would in fact be collected within weeks,” the spokesman pointed out.

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