Mounting Complaints About HMRC Tax Credits

Jack Humphrey, Regulatory journalist
September 22, 2010 /

Complaints against HM Revenue and Customs are piling up and there are several cases pending at the Adjudicator’s Office. The investigators are drawing attention to the way they are handling the over payments.

The Adjudicator’s Office 2010 Annual Report indicates that 67% of the workload was concerning to HMRC tax credits of which 1239 tax credit complaints were resolved by the investigators and over 57% were upheld partially or substantially.

Most cases of complaints with regard to tax credit were concerned with the refusal of HMRC’s to write off excess payments. The Adjudicator also acknowledged concerns with the handling of cases involving application of Extra Statutory Concession A19 (ESC A19).

For example, significant amounts of tax remained due to a retired man who took a part-time job as his PAYE tax code was duplicated. HMRC argued that he should have knowledge about his tax affairs which was not in proper order and sought recovery of the under-payment.

The complaint was partially upheld by the Adjudicator, as it was not sensible to suppose that the man might have been able to work out that he had not been paying enough tax, particularly because he did not receive any tax codes for the years concerned.

According to the report of the Adjudicator’s Office, staff should place themselves in the position of each individual taxpayer when the “reasonable belief” element of ESC A19 is taken into consideration. The staff will be able to apply the concession justly and consistently for all of their customers only if the customer’s probable level of understanding of tax is being appreciated and irrational assumptions is avoided.

Consultation with the Parliamentary and Health Service Ombudsman, made the complaint handlers use an audit template in order to ensure that they have followed the appropriate guidelines.

 

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