When tax owed to HM Revenue & Customs (HMRC) becomes overdue for payment, it is classified as tax debt. In 2023, HMRC published its tax debt strategy, with an update in 2025. It aims to make it as easy as possible for customers who can pay to do so, support those who need help and take effective enforcement action against those who refuse to pay or cooperate.
At the end of 2024-25, HMRC was owed £42.8 billion in tax debt, or 5% of total tax receipts. In the five years leading up to the pandemic, the tax debt balance averaged at around £15 billion, or 2.5% of tax receipts. The PAC reported on HMRC’s management of tax debt in 2022, finding that the pandemic had changed the nature and scale of tax debt, with an enormous task for HMRC to bring tax debt back to pre-pandemic levels, and expressing a lack of confidence in HMRC’s ability to do so. Its 2025 report into HMRC’s customer service and accounts found that its investment in debt management had not sufficiently reduced the amount of tax owed.
In autumn 2026, the National Audit Office (NAO) publishes its report into HMRC’s management of tax debt, examining whether the tax authority is well-placed to reduce the tax debt balance in line with its strategic ambition while managing the flow of new tax debt.
Proceeding from the NAO’s report, the PAC will take evidence from senior HMRC officials as it scrutinises HMRC’s attempts to reduce the tax debt balance.
The Committee will welcome written evidence on these issues in due course.
Please look at the requirements for written evidence submissions and note that the Committee cannot accept material as evidence that is published elsewhere. The Committee decides what information to publish and how. You can request anonymity or confidentiality when you send evidence, but it is for the Committee to say whether it will agree.It may treat submissions confidentially, even where you have not requested this.
Please note that the Committee’s inquiry cannot assist with individual cases. If you need help with an individual problem you are having, you may wish to read the information on Parliament’s website about who you can contact with different issues.