Low income tax campaigners have welcomed the Exchequer Secretary’s announcement today that 250,000 pensioners will not have to repay tax underpayments that have accrued during 2008/09 and 2009/10 through the failure of the PAYE system to tax their state pensions correctly.
The Low Incomes Tax Reform Group (LITRG), and other tax bodies including TaxHelp for Older People (TOP), have long campaigned for HMRC to take a more sympathetic view where pensioners on low incomes unwittingly pay too little tax because of the failures of government systems. The Exchequer Secretary’s announcement is an eminently fair and reasonable way of dealing with a situation that has arisen through no fault of the pensioners concerned. It is good news for the 250,000 pensioners.
John Andrews, Chairman of LITRG, said:
“It is pleasing that HMRC took on board our suggestion to review this group of pensioners for whom extra-statutory concession A19 would almost certainly have applied to write off the liability. This way the worry and hassle has been avoided.
“It is less good news for those who will be caught with a potential liability for 2007/08. Many such taxpayers receiving a demand for that year will have a good case to resist the collection of the liability. LITRG will be posting full guidance on its website for those who receive such notices.”
Notes to editors
1. The Government’s written statement on ‘PAYE Update’, issued today, can be read at: http://www.publications.parliament.uk/pa/cm/cmtoday/cmwms/archive/110111.htm#d2e192. The Low Incomes Tax Reform Group (LITRG) is an initiative of the Chartered Institute of Taxation (CIOT) to give a voice to the unrepresented. Since 1998 LITRG has been working to improve the policy and processes of the tax, tax credits and associated welfare systems for the benefit of those on low incomes. Its website is www.litrg.org.uk.