'Under-taxed will have to pay'
08 September 2010The Government has warned people not to "build up their hopes" of appealing against demands for back-tax as more taxpayers received letters through the post.
Treasury minister David Gauke issued the warning that taxpayers affected by a HM Revenue & Customs (HMRC) blunder have scant chance of escaping payment.
The HMRC has begun contacting the six million taxpayers who contributed too much or too little. Of those affected, some 1.4 million people will have to pay out an average of £1,428 each, although 4.3 million will be in line for a rebate.
Some people may refuse to pay the back-tax demand because the HMRC might have exceeded its own time limits in which it can ask for the money, experts have said. The HMRC needs to issue demands for underpaid tax within 12 months of the close of the tax year in which it found people have underpaid, under tax rules.
But if people provided all the information needed to get their tax code right, HMRC should have used these details within 12 months of the end of the tax year in which it was received to claw back the extra money.
If HMRC failed to do this, taxpayers can ask for an Extra Statutory Concession, also known as an ESC A19.
The latest round of errors date back to April 2008, meaning anyone who alerted HMRC to changes in their circumstances that affected their tax code before the start of the new tax year in April 2009 may be able to cite this clause.
Copyright Press Association 2010
