Request
I would like to know the breakdown of debt owed to the tax department in the years 2015 to present. If possible could you break this down into month by month and the different types of tax that is due ie business tax, personal tax, ITIS? Under the new Chief Executive, Charlie Parker, have any consultants been drafted in to deal with the deficit? If so, can you advise how much this will cost?
Response
This question is answered in two parts: Part I covers the request for information relating to the amount of income tax outstanding, or tax debt owed, at the end of each year 2015 to 2017 for personal and company tax and GST. Part II covers the request for information relating to any consultants that the new Chief Executive Charlie Parker may have drafted in to deal with the debt.
Part I
This answer provides taxation debt that is overdue for payment and not tax receivable raised via the assessment process, which may not be due for payment until the following year. Overdue tax debt is formally recorded at the end of the financial year and actively pursued by States Treasury and Exchequer throughout the year. The amount of taxation receivable (not all of which is due for payment) is formally recorded in the States Annual Report and Accounts at the end of the reporting period 31 December each year. A breakdown of the cumulative (*) Taxation receivables by tax type as presented in the accounts is shown in Table 1 below.
Table 1
Income Tax Receivables | 51.3 | 65.0 | 85.0 |
| Personal Tax | 42.4 | 55.0 | 70.6 |
| Company Tax | (1.3) | 0.6 | (0.7) |
| ITIS | 7.4 | 6.2 | 11.3 |
| Late Fees and Surcharge Debtors | 2.7 | 3.1 | 3.7 |
| Debtors in relation to legal costs | 0.1 | 0.1 | 0.1 |
Income Tax Accrued Income | 5.8 | 2.1 | 3.2 |
| Personal Tax | 3.0 | .08 | 1.3 |
| Company Tax | 2.8 | 1.3 | 1.9 |
GST | 5.3 | 5.7 | 6.2 |
(*) The cumulative amount will include debts from previous years.
It is important to note that ITIS payments in respect of Personal Tax are made approximately two weeks in arrears. Therefore a better reflection of cumulative debt is expressed if these payments are removed from the total receivables figure in Table 1 above. In addition 2017 receivables also include estimate assessments for Current Year Basis (CYB) tax payers which will not be due for payment until 2018 and should therefore also be removed.
Table 2 below shows the adjustment needed to the Personal Tax receivables amount to establish the debt amount:
Table 2
| | 2015 - £m | 2016 - £m | 2017 - £m |
Personal Tax (Debt) | 22.0 | 29.5 | 25.0 |
| Receivable 31 December (Table 1) | 42.4 | 55.0 | 70.6 |
| Add: Accrued Income (Table 1) | 3.0 | 0.8 | 1.3 |
| Less: ITIS received on 15 January in respect of December salaries | (23.4) | (26.3) | (27.3) |
| Less: CYB Estimates | - | - | (19.6) |
Company Tax (Debt) | 1.5 | 1.9 | 1.2 |
| Receivable 31 December (Table 1) | (1.3) | 0.6 | 0.7 |
| Add: Accrued Income (Table 1) | 2.8 | 1.3 | 1.9 |
GST (Debit) | 5.3 | 5.7 | 6.2 |
Part II
To be consistent with the answer provided in Part I the term ‘deficit’ has been taken to mean debt outstanding. In this context the answer to this is none; Charlie Parker has not employed consultants to deal with outstanding debt.
However, it is worth noting that the Taxes debt team has recently been restructured to focus on reviewing and pursuing significant aged debt. New processes have been developed and continue to be developed to facilitate this. In addition a new Revenue Management System, which is currently being implemented to replace the aging tax system, will be much better equipped on reporting and analysis tools improving efficiency and effectiveness of monitoring and managing debt.
