2007

Tax and the national minimum wage debate The TUC is pressing for an increase in the national minimum wage and also for the adult rate to be adopted from age 18 rather than 22 as now. As always, taxation should be factored into the debate; but as often happens it is not explicitly taken into account. 20 December 2007
Carers and the 50+ element of working tax credit LITRG has had enquiries from people over 50 who are receiving carer’s allowance, asking whether they are entitled to the 50 element of working tax credit (WTC) on going back to work. Our analysis says they can; HMRC disagrees. 12 December 2007
Reducing backdating for pensioners and Alice in Wonderland 'When I use a word, it means just what I choose it to mean - neither more nor less' said Humpty Dumpty. This is a useful quote to remember, especially when reading press releases from the Department for Work and Pensions (DWP). The DWP announced earlier this week that from next year it proposes that those aged 60 and over will only get 3 months’ backdating of benefits rather than 12 as of now. This was claimed to be 'less intrusive' for pensioners. 7 December 2007
More poor service for pensioners Our recent survey showing poor performance by banks and HMRC regarding tax over-deducted from bank interest has been followed by HMRC publishing an update of its leaflet on the subject. It is late; it is incomplete; it is unhelpful to those with disabilities; it lacks customer focus and merely confirms how badly HMRC serves its low income customers. 5 December 2007
Lost tax credit claims - but all is not lost It is not uncommon for HMRC to lose letters and claims from their customers. When the Tax Credit Office loses tax credit claims it is the customer that is forced to claim again. This can mean a significant loss of tax credits. But HMRC’s own guidance says that claimants should receive one-off system payments when they can produce evidence of a lost claim. 3 December 2007
Tax credit overpayments: claimants still need answers Some take the view (including some parliamentarians) that the introduction of ‘playback’ on tax credit annual renewal forms solves the question for claimants of ‘why did this overpayment occur’. Playback does help sometimes; but HMRC are far from giving claimants what they need. 28 November 2007
New help on tax matters for disabled people. If you are someone overcoming a disability or the parent or carer of someone who is, we hope our new brief guide to some of the tax matters that might affect you will prove helpful. 23 November 2007
Extraordinary loss of child benefit records The Chancellor of the Exchequer announced yesterday that HMRC had lost two computer discs containing the personal records of child benefit recipients. These discs contain details of some 25 million individuals and 7.25 million families. 21 November 2007
Between a (Northern) Rock and a hard place? Investors who made a panic withdrawal from their Northern Rock Individual Savings Accounts (ISAs) are to receive special consideration. But what does this mean for investors in future and will this create a precedent? 20 November 2007
Banks fail low-income pensioners Over many years LITRG has conducted small surveys of how banks provide help to their low-income pensioner population. Every time we have done that we have been disappointed by what we have found. Those pensioners who are not taxpayers need help from their bank to prevent tax being deducted from interest on savings accounts. Our latest survey once again demonstrates that the banks are generally failing to provide appropriate and up-to-date information. 12 November 2007
The Public Accounts Committee and tax credits Today the HMRC Chairman is due to face the Public Accounts Committee to discuss progress in collecting the £3.9 billion of tax credit overpayments which were outstanding at 5 April 2007. LITRG wishes that as least as much attention were spent on understanding why such overpayments arise and how unfair it is to expect low-income families to repay some of this debt. 10 October 2007
Not much Pre-Budget joy for those on low incomes Alastair Darling was cautious in his first Pre-Budget address, and failed to redress the blow to low-income taxpayers delivered by his predecessor. Tax liabilities for those on very low incomes will rise next April because of the abolition of the 10% starting rate on earnings and pensions. That increase will be partly offset by rises in the personal tax allowances for people over the age of 65, and in tax credits. However, if you are on a low income, but neither a pensioner aged 65 and over nor 9 October 2007
Gift Aid: Time for a change The Treasury published a consultation in June this year looking for ways to improve the Gift Aid system and so increase charitable giving across the UK. In its response, LITRG examined how Gift Aid could be altered to include non-taxpayers so ensuring that all citizens are recognised as making a contribution. 4 October 2007
Proposed changes to tax collection methods LITRG has responded to HMRC proposals to change how customers pay tax and its processes for tackling late payments. In our submission, we welcome some of HMRC’s suggestions to increase payment flexibility. However, we caution against increasing automation of tax collection without sufficient safeguards. 2 October 2007
Council Tax Benefit - call for reform One in three people who are entitled to it do not claim council tax benefit (CTB) and the Communities and Local Government Select Committee has called for major reforms. The LITRG call for a rethink was endorsed by the Committee’s report 22 August 2007
HMRC Modernisation: To serve and protect? LITRG has submitted its response to the latest consultation by HMRC on what powers they should take and what safeguards taxpayers and tax credit claimants should be given. We are concerned that HMRC, in its desire to rationalise its processes for business, will once again forget the need to give appropriate help to the most vulnerable of its customers. 15 August 2007
Opportunities for all? It may not be widely known that 2007 has been designated ‘European Year of Equal Opportunities for All’. At the same time there are significant changes afoot in the UK, with the establishment of the Commission for Equality and Human Rights (CEHR). Over the years LITRG has drawn to the attention of HMRC and other government departments examples of discrimination against minorities with special needs. CEHR may need to be proactive if it is to prevent large government departments from carrying on 13 August 2007
Treasury Committee measures HMRC's progress Last month the Treasury Committee published a report on how well HMRC have cut back their resources following merger whilst maintaining the level of service provision. Significant progress is being made on staff reductions but much remains to be done to provide an acceptable customer service 10 August 2007
Another 250,000 families to receive a tax credits review The new Financial Secretary to the Treasury (Jane Kennedy) got off to a difficult start last week by announcing further problems identified with the tax credits system in the years 2003-04 to 2005-06. However it appears as if HMRC are going to take these mistakes on the chin and not seek recovery from claimants. 30 July 2007
LITRG calls for overhaul of council tax benefit It is essential that any system of taxation should be transparent, as simple as possible and related to the ability of the individual to pay. In our submission to an influential group of MPs, we argue that rebranding council tax benefit as a rebate would both help simplify the system and improve take-up. 16 July 2007

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