Plan to let taxpayers pay debts with credit cards

Allowing taxpayers to settle bills with their credit cards could help to reduce the £14 billion debt owed to the Inland Revenue, Whitehall's spending watchdog suggested today.

The National Audit Office said the Revenue might also want to examine the pros and cons of selling some of the hardest-to-collect debts to private collection agencies.

In a report on the Revenue's performance in recovering debts, the NAO noted that of the £14 billion outstanding at the end of last March, a large part was owed by insolvent businesses and taxpayers who could not be traced. Of the total, more than £3 billion was more than a year old.

The report also noted that in the year to October 2002, the Department wrote off more than £500 million in tax and other miscellaneous duties.