10 November 2010

Benefits and Work readers are being urged to resist tax underpayment demands now being sent out to some incapacity benefit claimants.  The underpayments of tax have come about as a result of well publicised failures of HMRC software, but demands for repayment can be successfully challenged.

Benefits and Work has heard from John Andrews, chairman of the Low Income Tax Reform Group (LITRG) who told us:

“I thought you might like to encourage your readers to fight any tax underpayment demands they might get for 2008/09 and 2009/10.

“The Low Incomes Tax Reform Group tries to monitor developments for low income taxpayers and we have been seeing incapacity benefit claimants getting these demands because for the first time HMRC have joined up records from the DWP of incapacity benefit with other income sources such as an early retirement pension.

“People who thought they weren’t taxpayers are shown to be so.

“If someone gets one of these notices they should fight it, as it is almost certain that Extra statutory concession A19 will apply and if used should get the liability written off.”

Extra statutory concession A19 relates to HMRC failing to take action at the right time about information which they already had in their possession.

You can get step-by-step details of how to challenge an underpayment demand from the LITRG website.

LITRG have also set up a new section of their site for disabled people and carers.


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