Collecting Tax Debts Through PAYE

Over recent years, HMRC has concentrated its debt collection resources, out of necessity, on high-value debts. Unsurprisingly, say HMRC, this has led to a considerable increase in the number of small debts, particularly those less than £1,000 in value. In most cases, the low value of these debts meant that taking action to enforce their payment would have been inappropriate.

However, the result of all this is that more tax debts will be reflected in your Code Number used by your employer. Specifically the intention is to increase the maximum amount that can be coded out from £2,000 to £3,000 - basically this means the Revenue can now collect up to £600 worth of arrears. This will clearly ensure that more people with small debts can benefit from this collection method, and HMRC can direct its resources to those who deliberately choose not to pay tax.