CIOT: Government listen to call for increase in tax debt collection limit

The Chartered Institute of Taxation (CIOT) welcomes the announcement in the Budget Red Book that HMRC will increase the amount of tax debt that can be collected via the Pay As You Earn (PAYE) system.

CIOT President, Patrick Stevens, said:

“We are pleased to note that the Government proposes to increase the amount of underpaid tax that can be collected via PAYE, as called for by the CIOT. In particular, this will help to ease the pain for those on higher incomes due to face a significant High Income Child Benefit Charge in January 2015.

“Permitting spreading across more than one year will also help some taxpayers settle their debts and make it easier for HMRC to collect debts.

“Currently, only amounts of less than £3,000 can be coded out. Those with a tax liability in excess of £3,000 are required to pay it in full, which can be extremely difficult for some individuals.”

Patrick Stevens continued:

“It is good to see that the Government plan to consult on how the change will be brought in. Although we think this is very much the right way to go, we do need to ensure that mechanisms are in place to give affected taxpayers full information in good time for them to choose how best to pay their tax bill.”

Notes to editors

1.       The current rule permits a taxpayer to request that tax underpayments of less than £3,000 are collected through the PAYE system. It also permits HMRC to enforce collection through the PAYE underpaid debts of the same size.

2.       The announcement on the proposed change is at paragraphs 1.215 and 2.203 of the Red Book.

3.       The Chartered Institute of Taxation

The Chartered Institute of Taxation (CIOT) is the leading professional body in the United Kingdom concerned solely with taxation. The CIOT is an educational charity, promoting education and study of the administration and practice of taxation. One of our key aims is to work for a better, more efficient, tax system for all affected by it – taxpayers, their advisers and the authorities. The CIOT’s work covers all aspects of taxation, including direct and indirect taxes and duties. Through our Low Incomes Tax Reform Group (LITRG), the CIOT has a particular focus on improving the tax system, including tax credits and benefits, for the unrepresented taxpayer.

The CIOT draws on our members’ experience in private practice, commerce and industry, government and academia to improve tax administration and propose and explain how tax policy objectives can most effectively be achieved. We also link to, and draw on, similar leading professional tax bodies in other countries.  The CIOT’s comments and recommendations on tax issues are made in line with our charitable objectives: we are politically neutral in our work.


The CIOT’s 16,500 members have the practising title of ‘Chartered Tax Adviser’ and the designatory letters ‘CTA’, to represent the leading tax qualification. 

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George Crozier
External Relations Manager

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