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28 Jun 2011
UP TO 164,000 pensioners had underpaid PAYE in 2010-11 but the government will not be able to write these debts off, Accountancy Age has learnt.
HM Revenue & Customs is set to publish details of PAYE reconciliation figures for 2010-11. There are 164,000 pensioners among those who have underpaid tax; this compares with 250,000 pensioners last year, who had their underpayments written off in January this year.
Further reading
However, Mike Warburton, tax director at Grant Thornton, said that Exchequer secretary to the Treasury David Gauke has told him that the government will be unable to write off the tax of the 164,000 pensioners.
"Gauke said he does not have the power, it is a matter for HMRC commissioners," Warburton told Accountancy Age. The government said that the 250,000 affected pensioners from last year would have qualified under Extra Statutory Concession A19.
However, Warburton added that the minister said they cannot do the same for 2010-11 because underpayments discovered within 12 months of the tax year they relate to cannot be written off under the wording of ESC A19.
Furthermore, the commissioners are guided by the 2005 House of Lords' Wilkinson decision. "This states that if a statute says tax and it is not covered by a concession then you have to pay the tax, otherwise taxpayers have to be treated differently. So even if they want to be nice to pensioners, they can't," Warburton said.
He concluded by asking: "Is it right that the minister and HMRC are prevented from doing something sensible by what is effectively a judge-made decision?"
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Warburton is wrong
Most of what he says makes sense - and then right at the end he blows it. HMRC and the minister are most definitely NOT limited by a "judge made decision". They are limited by the express wording of the LAW. If Parliament writes c**p law, it is not the judge's fault when they apply it. It is the fault of MPs. This passing the buck is typical. The Con-Dems are simply up to the same tricks as the old Labour administration. Cover up their own incompetence by blaming other people. Stephen Timms was the same when he was at the Treasury when he gave me a cracking defi Orion of tax planning (of which he approved) and tax avoidance (of which he disapproved), and it all came down to whether people used the law in a way he liked or in a way he didn't like. Of course, as a politician writing the law it could never be his fault. Oh no.
Posted by: David Nicoll, 28 Jun 2011 | 19:06
unless
the revenue ,
failed more than once to make proper use of the facts they had been given about one source of income.
Allowed the arrears to build up over two whole tax years in succession by failing to make proper and timely use of information they had been given.
Posted by: Spike, 29 Jun 2011 | 11:52
The Tax Department
is unfit for purpose and should get a big shake up, when you plan your retirement you take the decision to retire based on the figures you can afford, and then this department, that gets paid to do a job ignores all the information you give them and wacks you with a bill you can ill afford, its shameful and yet again no one takes responsibility, I have no sympathy with the civil service on recent strikes re thier pensions etc and I doubt many pensioners have
Posted by: mary leeke, 10 Jul 2011 | 16:31