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MSE News: Government: 'We can't afford mass tax write-offs'

This is the discussion thread for the following MSE News Story:

"The Government says it cannot afford to write-off the £2 billion of underpaid tax owed by 1.4 million people ..."

Comments

  • Crabman
    Crabman Posts: 9,939 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    "We simply cannot afford to write off all of these underpayments."

    Earlier this year HMRC settled a legal case allowing Vodafone to effectively escape UK tax liability of £1bn.

    Vodafone accounts listed UK tax liability of £2.2bn yet HMRC agreed they should pay a tax bill of just £1.25bn.

    Quite why tax income from a multi-national corporate behemoth should be written off but underpayments affecting individuals and families resulting solely from HMRC's admitted errors are met with the above comment from the government is a mystery. Or not.

    P.S: Staying on the subject of Vodafone, they lost a legal case in India today and have been ordered to pay $2 billion in capital gains tax there. Some you win, some you lose. :)
  • Whether or not the Government can afford to write off the underpayments is not an issue. If the rules say they cannot force repayment they are stuffed.

    Except, as with pensions and accrued employment rights, governments are happy to tear up the rule books if it suits them (bringing in new legislation if necessary). They won't pick fights with the huge companies preferring instead to go after the weak.

    GG
    There are 10 types of people in this world. Those who understand binary and those that don't.
  • Amidst all the rhetoric about the recently revealed personal tax underpayments coming from shortcomings in the PAYE system I have not seen anyone spell out that the claims for underpaid tax now being sent out may themselves be incorrect due to lack of information.
    These underpayments were apparently generated by failure to adjust PAYE codes for additional income sources, for example where an employee receives a taxable benefit from their employer eg. gym membership or private health insurance. Other possible causes are where a taxpayer is subject to higher rate tax on bank interest or dividend income which has not been allowed for in their PAYE code.
    But there are also possible reasons why too much tax may have been deducted through PAYE through no fault of HMRC or the PAYE system. Taxpayers who do not submit self assessment tax returns but who pay personal pension contributions or make charitable donations under gift aid often assume that they have received full tax relief at source for these payments. In fact they have only received basic rate relief and if they are higher rate taxpayers they need to notify HMRC of their payments so that their tax bill can be adjusted.
  • ALIBOBSY
    ALIBOBSY Posts: 4,527 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Well I have always been told by Hr departments and once a union rep that the law states is is an individuals responsibility to ensure tax paid is correct. However i do have sympathy for those on PAYE who assume all is correct.

    I do not think a mass write off would be fair. The rules are there so any who believe they gave the correct info and it wasn't acted upon by HMRC can have their claim looked at on an individual basis.
    The rest will have to pay, but they should be allowed to add it onto their PAYE payments for as long as the underpayment lasted ie if going back 2 years should get 2 years to pay. That way the money will be recovered eventually, but people don't get such a shock in amounts having to pay up front/big drops in take home pay.

    ali x
    "Overthinking every little thing
    Acknowledge the bell you cant unring"

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