2005

HMRC Discussion Paper on Inheritance Tax (IHT) and Pension Simplification - LITRG response The discussion paper on Inheritance Tax (IHT) and Pension Simplification sets out how pensions choices will change after 5 April 2006. It then goes on to consider the implications of the current IHT system on the new pension regime and asks for suggestions as to how it should be modified where the existing law is considered impracticable in any respect. 5 October 2005
Tax credits: the flagship and the icebergs The Government envisaged its tax credits system as a flagship reform of the tax and benefits regime. Yet a series of highly critical reports from welfare rights and parliamentary bodies has shown up the unfitness of the flagship for the waters in which it aspired to sail. Already it has encountered obstacles, some of which are icebergs with the greater part of their mass still invisible below the surface. Is repair possible? Or is the flagship structurally unsound and in need of redesign. 26 September 2005
Unfair treatment for retirement annuitants to end One of LITRG's most persistent campaigns is about to come to fruition. Low-income pensioners who receive retirement annuities have for years had too much tax deducted from their retirement annuities. But from April 2007, this will change. Only the tax that they actually owe will be taken off their pension before they receive it. This follows a seven-year campaign by LITRG to get justice for those who were left behind when pensions were last modernised in 1988. 26 September 2005
The significance of 30 September for tax and tax credits For income tax self-assessors, 30 September is an important date, but not a deadline as such. For tax credits claimants, it is a deadline not to be missed. In this article we look at what it is useful to have done, and what must be done, by that date. 12 September 2005
Justice still denied to tax credit overpayment cases The Government Minister responsible for tax credits has now rejected the Ombudsman's recommendation that all tax credit overpayments that arose through official error during the first two years of the scheme should be written off. But people now have a far better chance of getting their overpayments written off under the new 'streamlined procedure' than those whose requests were dealt with in accordance with earlier practice. This raises issues of natural justice. 12 August 2005
State pension: to defer or not to defer (Part 1) Since April this year it has been possible to defer your state retirement pension, and when you do decide to claim it to take a lump sum in lieu. In order to decide whether to defer or take the pension straight away, you need to consider what effect either course of action will have on your tax liability and entitlement to state benefits. This article looks at how the lump sum is taxed, and how it and your deferred pension are treated when working out your state benefits. 10 August 2005
Human rights and tax wrongs Two recent cases on tax and human rights show the limitations of the Human Rights Act, enacted in the UK in 1998. The UK courts cannot use that Act to overturn laws properly enacted by Parliament, even if those laws are incompatible with human rights. To do that an applicant has to take his case to the European Court of Human Rights in Strasbourg, which alone can offer 'just satisfaction' for an infringement in the national laws of the UK. 10 August 2005
New procedure accelerates tax credit overpayment write-off Recent efforts by the Government to improve the administration of the tax credits system include a 'streamlined procedure' for deciding disputes about whether overpayments should be recovered. Recent figures show that this streamlined procedure may already have benefited claimants. 28 July 2005
How to survive an enquiry by the Revenue - new text on the website This is a new section on the website covering a variety of issues including the initial contact by the Revenue, the stages of an enquiry, how to deal with specific types of tax and tax credit enquiries, negotiating a settlement and the Human Rights Act 1998. 6 July 2005
HMRC and the Taxpayer: Modernising Powers, Deterrents and Safeguards - LITRG response The new department of Her Majesty's Revenue and Customs owes a special responsibility to those who rely wholly or mainly upon the department for advice and explanations about their obligations and entitlements under the tax and tax credits systems. Taxpayers and tax credit claimants on low incomes have a right to expect full, clear and up-to-date explanations from HMRC about what they must do to comply with the tax and tax credit system, and their rights under it. 4 July 2005
Generous employers can give tax credit problems Employers who provide generous sickness or maternity arrangements can, through no fault of their own, contribute towards tax credit overpayments of their employees. This is due to rules hidden in the small print of tax credits law and arises most often where generous employers have schemes that continue longer than the state provides. 4 July 2005
Refugees made to suffer further It’s enough to be persecuted or tortured in your home country without having the forces of bureaucracy descending upon when you have fled for shelter to the UK. This is what is happening here to some refugees granted asylum when trying to deal with the Revenue and to be paid what they are due. 30 June 2005
Watchdog highlights tax disadvantages for the unrepresented The latest report from the National Audit Office (NAO) 'HM Revenue and Customs: Filing of Income Tax Self Assessment Returns' published today, highlights the disadvantages that exist for unrepresented taxpayers within the self assessment system and calls for greater support for these taxpayers. The Low Incomes Tax Reform Group (LITRG) participated in this study and are pleased to note that many of the points raised in our response are reflected in their findings and recommendations. 22 June 2005
Complaining can improve service Whilst the tax credits system is settling down, complaining about its operation has become routine, rather than the exception. The advantage of a complaint is that if things are not dealt with appropriately at some point in the process, an independent third-party will be able to take a view. 16 June 2005
HMRC must respect its low income customers, say LITRG The new department of Her Majesty's Revenue and Customs owes a special responsibility to those who rely wholly or mainly upon the department for advice and explanations about their obligations and entitlements under the tax and tax credits systems. Taxpayers and tax credit claimants on low incomes have a right to expect full, clear and up-to-date explanations from HMRC about what they must do to comply with the tax and tax credit system, and their rights under it. 14 June 2005
Website success We don't like to boast at LITRG but it is good to receive recognition from your peers. So when, last week, LITRG won the prestigious LexisNexis award for "best tax website" for 2005 we were quietly pleased. Last year's winners were the Inland Revenue who have rather more funds than we do, so it was good to see recognition for what can be done with very limited resources. 29 May 2005
Important government statement on tax credits Yesterday, the PMG, Dawn Primarolo issued an important written statement to the House of Commons and it is reproduced at the end of this article. It represents the first public acknowledgement that some of the improvements that LITRG and other groups have been highlighting for some time do require immediate attention. We welcome this announcement and the positive commitment to improve current processes. The PMG and HMRC can count on our full support in helping to bring about these changes. 27 May 2005
Childcare Vouchers - Continued In our first article on childcare vouchers we indicated that employees who get help with their childcare costs through tax credits should be very careful before taking childcare vouchers from their employers. They could be a lot worse off. 13 April 2005
Attention - the grandparent child-caring army! Until now, children could go to their grandparents to be looked after while their parents are working; and if grandparents have applied for approval as child carers, parents are able to claim help with child care costs through working tax credit. A little publicised change in the rules for approved carers means for parents to continue to get child care support, grandparents who have used this route to become qualifying childminders will have to look after at least one non-related child. 12 April 2005
A travesty of democracy "No taxation without representation" was one of the battlecries from which our democratic structures have evolved. But it has been seriously undermined in 2005. 11 April 2005

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