Arrears of Tax

Summary

The Treasury responded to a request for data on tax arrears, write-offs, collection powers, and unassessed returns over the last three years. The authority disclosed specific monetary figures for debts and write-offs, cited relevant legislation for collection powers, and attributed a backlog of 7,424 unassessed returns to staffing shortages.

Key Facts

• Tax arrears are defined as collectible debts outstanding for six months or more.
• Total tax arrears increased from £11.7 million in 2017 to £14.3 million in 2019.
• Debts are written off only after all collection procedures are exhausted and deemed irrecoverable.
• Collection powers are derived from the Income Tax Acts and the Administration of Justice Act.
• A backlog of 7,424 tax returns remained unassessed as of February 2020 due to lower-than-expected staffing levels.

Data Disclosed

• £11,735,915.46
• £13,056,841.21
• £14,311,141.42
• £617,294.41
• £386,948.38
• £1,419,810.11
• 31/3/17
• 31/3/18
• 31/3/19
• 7424
• 17th February 2020
• 19th November 2019

Original Request

What have been the tax arrears for the last 3 years. How much has been written of and why What powers does Treasury have available to it to collect arrears and how many times have these been used. What is the current number of tax returns that still to be assesed and why has this occurred

Data Tables (2)

Full Response Text

Freedom of Information Seyrsnys Fysseree

The Treasury Government Office, Douglas Isle of Man, IM1 3PU

Telephone: (01624) 685605 Email: FOI.Treasury@gov.im

Government Website: www.gov.im

Our ref: 1178052 21 February 2020

Dear ###

I write further to your request which was received on 12 February 2020 which states:

"What have been the tax arrears for the last 3 years? How much has been written of and why?

What powers does Treasury have available to it to collect arrears and how many times have these been used? What is the current number of tax returns that still to be assessed and why has this occurred?"

The information which you have requested is detailed below; Response What have been the tax arrears for the last 3 years? The figures below represent the amount of income tax arrears as at 31st March for each of the last 3 complete financial years at the time of your request.
Please note that Treasury deem arrears to be collectible debts which have been outstanding for six months or more. The values displayed are arrears for all tax types and for all outstanding tax years. Tax Year Ending Amount of Tax Debt 31/3/17 £11,735,915.46 31/3/18 £13,056,841.21 31/3/19 £14,311,141.42

How much has been written of and why? The figures below are the amount of tax arrears written off as at 31st March for each of the last 3 complete financial years at the time of your request. The values displayed are total written off for all tax types and for all outstanding tax years.
Before a debt is written off the Division will have exhausted all collection procedures and these debts have been deemed irrecoverable. Debts that have been written off will be written back should funds become available. Tax Year Ending Amount of Tax Written Off 31/3/17 £617,294.41 31/3/18 £386,948.38 31/3/19 £1,419,810.11 What powers does Treasury have available to it to collect arrears and how many times have these been used? The powers to collect arrears of income tax are found within the Income Tax Acts and the Administration of Justice Act which are available in the public domain. The relevant legislation is available online at legislation.gov.im which can be accessed at https://legislation.gov.im/cms/legislation/current/by- title.html The powers are used frequently on a case by case basis dependent on the specific circumstances in each instance. What is the current number of tax returns that still to be assessed and why has this occurred? The current number of tax returns received and still to be assessed as at 17th February 2020 is 7424 The reason was highlighted in a Tynwald question on 19th November 2019:- “I would like to take this opportunity to highlight that the Assessor of Income Tax has drawn to my attention that she has been experiencing difficulties with regard to staffing levels throughout the year. The section responsible for the processing and issue of assessment notices has been at lower staffing levels than would normally be expected which has resulted, at times, in delays to normal working practices and processing times. However, every effort is being made to process tax returns as soon as possible and in order to address staffing levels the Division has recently undertaken a successful recruitment

process to increase staff numbers to ensure that all taxpayers can be provided with the highest standards of customer service” Please quote the reference number 1178052 in any future communications.

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I will now close your request as of this date.

Yours sincerely