§ Rev. Martin Smythasked the Chancellor of the Exchequer, in view of the fact that the Inland Revenue is now having to write off bad debts of approximately £12 million per annum due to uncollected PAYE income tax, whether he will indicate what proportion of these are debts allowed to accumulate over periods in excess of the statutory time limit covering payment of this personal tax; in cases where legal proceedings have not been taken to obtain payment whether this has been done either by consent or direction of his Department; and in the absence of such legal proceedings failing to be taken immediately after the statutory time limit has expired for payment, whether it is his policy that the Inland Revenue should forfeit its rights as a preferential creditor in cases of bankruptcy or liquidation; and if he will now take steps to withdraw this right in such cases in future.
§ Mr. RidleyThe Inland Revenue estimates that approximately 90 per cent. of PAYE tax is paid within a very short time of when it becomes due. Every effort is made to secure payment as soon as possible from employers who fail to meet their obligations on time and tax is written off only after all the possibilities of collection action have been exhausted. Where necessary legal proceedings to recover what is owing are instituted but the timing of proceedings must depend on the facts of each 221W individual case. The Inland Revenue is responsible for collecting tax in accordance with the law; in cases of insolvency its claims will be made in accordance with the limited priority for such debts that the law provides.