LITRG issues warning over HMRC tax collection plans

Date: 20th May 2011

Government plans to collect old tax bills through the PAYE system have come under fire from one leading tax organisation.

HM Revenue & Customs has unveiled plans to collect more and larger tax debts by getting employers to take the money straight out of employees' wages.

The Low Income Tax Reform Group (LITRG) has recognised the efficiency the plan could offer but warned that things could go wrong.

"A person moving jobs can find their tax code doesn't keep up with them, so part of the debt is still owed and catches up with them again later. Or perhaps they lose their job and have no ongoing wages from which to deduct the old tax bill, so HMRC start chasing them to pay it in full even when they are in financial hardship," the body commented.

"Starting in April 2012, HMRC intend to collect more and larger debts through PAYE. So now is the time to resolve the problems."

Posted by Jacob Williams