HMRC may write off £1.5bn unpaid tax

HM Revenue and Customs (HMRC) is likely to write off some £1.5 billion of unpaid tax, it has emerged.

The organisation recently announced it is to take a softer stance on tax avoidance in a bid to reduce a huge backlog of pending cases and free up thousands of pounds.

According to the BBC, HMRC is not planning to follow up the majority past cases, as many of them are more than two years old which would allow them to be challenged legally.

Staff at the organisation confirmed that the only cases which will be actively pursued are those which could potentially be classed as fraud.

"For each underpayment there are thousands of pounds owed. Underpayments are very frustrating," said one employee.

"If we had the chance to sort it out three years ago we could have recovered the money. It is now likely to be written off if it's over two years - we're not looking at underpayments beyond two years."

It follows recent revelations that millions of people have paid the wrong amount of tax due to errors with the PAYE system, with 1.4 million facing large bills due to underpayment.