We are concerned that HMRC is not doing enough to identify vulnerable people who need extra support with their debts. The pandemic has left more people in vulnerable positions, such as managing serious illness, bereavement and with low resilience to financial shocks. The Financial Conduct Authority has reported a 15% increase in the number of adults who met one of their characteristics of vulnerability. Yet HMRC has not seen an increase in the number of customers it identifies as being vulnerable. Around 1,400 customers currently access help from its Extra Support Team, a tiny fraction of the 6.2 million customers with tax debt. HMRC is adopting the vulnerability toolkit developed by the Cabinet Office to better identify vulnerable customers. However, we are concerned that, despite this, HMRC may be failing to identify vulnerable people, and that it may therefore fail to provide them with extra support because it doesn’t understand actual need. HMRC acknowledges that the number of vulnerable customers it has identified looks lower than it would expect and that the take-up of some of its offers of support, such as the Breathing Space scheme, is low. 8 HMRC’s management of tax debt Recommendation: HMRC should ensure regular and adequate training is in place for staff and it should carry out research to independently estimate how many vulnerable people are affected by tax debt and how effectively it is identifying those customers and write to us with its findings. HMRC’s management of tax debt 9 1 HMRC’s capacity and capability to manage increased tax debt