HM Revenue & Customs (HMRC) should do more to reduce the amount of outstanding tax owed, according to the parliamentary spending watchdog.

The call comes in a report from the Commons public accounts committee, which points out that around a third of all tax payments are late.

The government was owed more than £17bn in taxes at the end of March 2008, with tax debts rising by 22 per cent during 2007/08.

The committee called on HMRC to try every means it could to tackle what is likely to be a growing problem of tax debt, while also making allowances for people and businesses that were in temporary financial difficulties.

Committee chair Edward Leigh said the tax department had been slow to adopt collection methods used by other authorities.

"It has started to make more methods of payment available to taxpayers - such as credit cards and direct debits - but it could take advantage of the latest developments in payment technology," Leigh said.

"Its debt-collection activities also tend to be conducted on a nine-to-five basis, which is not always the best way of contacting tax debtors."