§ Miss WiddecombeTo ask the Chancellor of the Exchequer how many and what percentage of outstanding debts to the Inland Revenue and Customs and Excise were recovered by his Department over the most recent period for which figures are available; what methods were employed; and in what percentage of cases litigation was pursued. [23504]
§ Dawn PrimaroloCustoms and Excise's debt management objective in 1996–97 was to ensure that month end arrears did not exceed 2.3 per cent. of 12 months payment trader liability. This was achieved with a figure of 2.21 per cent. Approximately 5 million separate debts were referred to Inland Revenue local offices in the year ending 31 October 1996, of which approximately 50 per cent. (2.5 million) were paid in that period.
In the first instance, both Departments will issue a letter to the taxpayer. Inland Revenue may also telephone or visit the taxpayer's home or business premises before recovery action is taken.
The method of recovery adopted will depend on the circumstances and nature of any particular case. Inland Revenue local offices will consider granting a period of time in which to pay, taking distraint action, commencing summary proceedings or instigating county court proceedings or similar actions in Scotland and Northern Ireland. If necessary, cases will be referred to the Inland Revenue's special enforcement offices for further action, including winding up or bankruptcy proceedings. Customs, in addition to granting a period of time in which to pay, would levy distress by certificated bailiffs (or sheriff officers in Scotland), or the use of court process which may lead to bankruptcy or winding up. In addition, Customs may, in appropriate cases, support voluntary arrangement proposals received from debtors.
§ Miss WiddecombeTo ask the Chancellor of the Exchequer what is his estimate of the expenditure incurred by the Inland Revenue and by Customs and 151W Excise in the recovery of debts for the most recent period for which figures are available; and what was the total amount recovered as a result. [23503]
§ Dawn PrimaroloIn the financial year 1996–97, the expenditure incurred by Customs and Excise and Inland Revenue in the recovery of debt was £37 million and £165 million respectively.
It is not possible to quantify the amount recovered as a direct result of that expenditure. In the financial year 1996–97, Customs discharged £2.5 billion of debt, which included tax collected, tax written off as irrecoverable at the time and accounting adjustments. The Inland Revenue does not separately measure the total amount of overdue tax that is collected as a direct result of action taken to pursue it during the year.
§ Miss WiddecombeTo ask the Chancellor of the Exchequer what is his estimate of the total value of debts outstanding to the Inland Revenue and Customs and Excise; what resources are being devoted by his Department to their recovery; and what is the average age of such debts. [23502]
§ Dawn PrimaroloCustoms and Excise estimates that, on average, some £1,400 million of unpaid liability is in the system at any one time. The total value of debts outstanding to the Inland Revenue at 31 October 1996—the latest date for which figures are available—was approximately £4.4 billion.
During the financial year 1996–97, Customs and Excise allocated £37 million to debt recovery, and the cost involved in Inland Revenue recovering debt was £165 million.
At the end of the financial year 1996–97, Customs and Excise estimates that approximately 68 per cent. of unpaid liability was less than six months old. The Inland Revenue estimates that £2.5 billion had been outstanding for more than three months at 31 October 1996.