HM Revenue & Customs' (HMRC) IT systems are hampering its efforts to collect billions of unpaid tax revenues every year. But the department says it cannot afford the £250m it would cost to link the systems and improve efficiency.
MPs on the Public Accounts Committee (PAC) said separate IT systems that cannot be linked are "major barriers to effective and efficient debt management".
It means that taxpayers with debts in different areas of tax cannot be joined, so it is not possible to highlight those who owe debts on different taxes.
In 2007/08, HMRC collected £450bn tax and National Insurance contributions from 35 million UK taxpayers. But on 31 March last year £17.3bn had not been paid.
HMRC said it would cost £250m to build systems that would link all of a taxpayer's records, which are currently held on different systems for different taxes.
The PAC report said, "The systems are old and not compatible with each other so the department cannot readily establish how many taxpayers have a debt on more than one tax."
Despite being unable to build a new system, the report says HMRC is looking at ways of linking up tax debts in its existing systems, for example by bringing VAT debts into its main debt management system.
The committee said HMRC should also do more to exploit developments in payment technology. It said there are not enough options for taxpayers and suggested that autopayment technology, Paypoint and Payzone should be looked at.
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