HMRC facing massive tax write-off
Overpayments to tens of thousands of households cannot be reclaimed
HM Revenue and Customs may be unable to
claim as much as £500m in overpaid tax credits, after not following protocol.
The Daily Telegraph reported a HMRC spokesman as confirming that
recovery officials failed to abide by section 18 of the
Tax Credit Act
2002 by not notifying the individuals involved that they were reviewing
their tax credit payments.
What this means is that money may have to be sent back to taxpayers who were
never entitled to it in the first place.
It is estimated that up to 250,000 cases are involved, although HMRC insists
90,000 of those can be rectified.