One of the legacies of the Covid-19 disruption is tax debt – the difference between your agreed tax liabilities and the amount you have actually paid to HMRC. Tax debt is different to the tax gap, which is the tax revenue lost through fraud, tax avoidance and accounting errors, but just as significant.
Government estimates have suggested that the value of tax debt was around £39 billion in December 2021 and is likely to rise further now that interest rates are creeping up and taxes are also increasing. Income tax is higher due to increased NICs and the freeze to personal allowances, plus there is the new Health and Social Care Levy. This will add to the existing debt mountain. (more…)