Treasury announces tax collection policy

The Treasury has announced that it expects to raise £240 million in the first year after launching a new tax collection policy.

Private sector debt collectors will be enlisted to collect up to £4.3 billion in unpaid taxes, as part of a budget crackdown spearheaded by HMRC.

The plan involves increasing HMRC’s capacity to follow up on cases of unpaid bills through phone calls, text messages, and letters. The move is estimated to raise £240 million in its first year, with additional funding of £140 million for HMRC.

Last year, the Government was owed about £40 billion in unpaid income tax and £30 billion in unpaid VAT. The new strategy will also target overseas sellers operating on platforms like Amazon to collect revenues.

The Chancellor said in his budget speech “I will provide HMRC with the resources they need to ensure everyone pays the tax they owe leading to an increase in revenue collected of over £4.5 billion across the forecast period.”

The initiative, which is set to be the second-largest revenue raiser for the Exchequer in the next few years, will help raise £4.5billion by April 2029.