TaxPersonal TaxTax claims time limit slashed to four years

Tax claims time limit slashed to four years

HMRC is under fire over reducing the amount of time taxpayers have to claim rebates over inaccuracies

Campaigners are up in arms over proposals to reduce the time limit for people
claiming back money over tax mistakes from six to four years.

They claim those most at risk from the tax man’s blunders are people on low
incomes and pensioners.

‘They can pay too much tax for a variety of reasons, including incorrect PAYE
codes; additional personal allowances not given, such as age allowance, blind
person’s allowance or married couples allowance; or through having 20% tax
deducted at source on savings interest, when no tax or 10% tax is actually due,’
said John Andrews, chairman of the
Low
Incomes Tax Reform Group
.

He added his organisation had come across many cases of pensioners in their
80s who had never benefited from age allowances and had been overpaying tax for
15 years or more.

It claimed that despite HMRC estimating there were 180,000 pensioners who had

overpaid tax, the department had yet to trace and contact these people.

The Group maintains it is ‘unfair’ for HMRC to able to pursue taxpayers’
mistakes for six years when there is a time limit of just four years for people
pursuing its errors.

‘Until such time as HMRC put their own house in order by matching all data in
their possession and contacting taxpayers who are likely to have overpaid, we
are strongly against a reduction in the time limit for claims,’ said Andrews.

The proposed change in law is tucked away in the Finance Bill 2008 which is
due to be debated in the next few weeks.

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