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Published on 5 August 2022

HM Treasury: Statutory Debt Repayment Plan consultation

LITRG have responded to a HM Treasury consultation on the draft regulations to introduce a Statutory Debt Repayment Plan.

LITRG response - HM Treasury: Statutory Debt Repayment Plan consultation.

HM Treasury launched a consultation of draft regulations to introduce a new Statutory Debt Repayment Plan (‘SDRP’), to provide a new way of assisting people in England and Wales with problem debt.

Whilst not commenting on the suitability and design of the scheme in the context of the wider debt advice landscape, LITRG have responded with comments relevant to tax debt, highlighting the following key points:

  • Government must bear in mind that a person’s level of tax debt can, in some cases, be incorrect, particularly if there are outstanding tax returns where HMRC has raised determinations and/or penalties that could be appealed. Debt advice providers will therefore need to be equipped with sufficient knowledge to identify and deal with/refer cases where the quantum of tax debt may be disputed.

  • Clarity is required as to how the proposed SDRP regulations would interact with HMRC’s own internal debt management processes, particularly in the context of existing ‘time to pay’ arrangements. Government departments will need to work closely with one another to ensure implementation of the proposed SDRP scheme is joined up and any incompatible internal practices are ironed out.

  • We have suggested that safeguards ought to be built into any joint debtor arrangements to ensure that individuals are adequately protected and not put into a SDRP that does not suit them.

  • We have also raised concerns that the proposed payment breaks set out in the draft regulations may not provide adequate flexibility for individuals suffering unforeseen financial difficulties.

LITRG’s submission can be found here.

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