2012

HMRC Customer Service – a long way still to go - LITRG Press Release HM Revenue and Customs (HMRC) still has a long way to go to deliver an acceptable level of service to taxpayers in need of help and advice, say campaigners for taxpayers on low incomes. 18 December 2012
Campaigners give a qualified welcome to tax changes affecting vulnerable trust beneficiaries - LITRG Press Release Campaigners for disabled people within the tax system have welcomed Tuesday’s announcement extending qualification for favourable tax treatment to trust beneficiaries receiving personal independence payment (PIP) daily living component at either the standard or enhanced rate. But they were very disappointed with the Government missing an opportunity to align and simplify the disparate provisions within the different tax regimes. 13 December 2012
Backdated tax credits – have you missed out? Some tax credit claimants may not have received payments they should have for periods before they made their claim (‘backdated payments’) because HMRC failed to notify them of their entitlement. As a result of our intervention, HMRC have now improved matters for new claimants, but disappointingly they will not revisit old claims unless specifically asked to do so. 7 December 2012
Tax campaigners call for more reinvestment in HMRC customer service - LITRG Press Release Tax campaigners have welcomed the news that the HMRC budget is to be protected from the cuts faced by other government departments, and also the promise of greater transparency for ordinary taxpayers. 6 December 2012
HMRC must tread very carefully on outsourcing tax credit debt - LITRG Press Release The Government announced yesterday that they are to conduct a payment-by-results pilot on outsourcing the collection of tax credits debt. This could mean that people with overpayments of tax credits will be dealing not with HMRC directly, but with debt collectors who will be paid by results, and who may therefore be tempted to be less than scrupulous in the methods they use. 6 December 2012
Autumn statement announcements present a mixed bag to pensioners - LITRG Press Release While welcoming the increase in the basic state pension to £110.15 from April 2013, tax campaigners have noted that a small band of pensioners on middle incomes are likely to gain from yesterday’s tax announcements, whereas the phasing out of the age-related personal allowance will hit those at the lower end of the income scale. 6 December 2012
Employee rights for shares – a poor trade off - LITRG Press Release The Autumn Statement announced that the government will proceed with a scheme whereby employees may forfeit certain employment rights in exchange for shares in their employer company. Those shares will be exempt from capital gains tax (CGT) but may still result in an immediate income tax and NIC liability. LITRG feels that this plan is misguided, particularly if it is offered to employees at the lower end of the income scale. 5 December 2012
Tax credits – few changes but more investigative checks on the way - LITRG Press Release LITRG has commented on the tax credit elements of today’s Autumn Statement. 5 December 2012
More people on low incomes pay less tax, but receive less benefits - LITRG Press Release The increase in personal allowance announced today is welcome, but the savings for low-income households are much lower when the corresponding reductions in means-tested benefits and universal credit are taken into account, say LITRG. 5 December 2012
New report backs campaigners’ concerns on Universal Credit - LITRG Press Release Campaigners for those on low incomes have welcomed today's report on universal credit from the House of Commons Work and Pensions Select Committee. 22 November 2012
HMRC’s vulnerable trusts consultation – an opportunity for useful and radical reform HMRC’s consultation on reforming the taxation of trusts for vulnerable beneficiaries is a prime opportunity for such trusts to be tailored to the needs of the beneficiaries rather than – as hitherto – compliance with a set of rather arbitrary tax rules. 14 November 2012
Tax campaigners warn of growing worker exploitation around misuse of limited companies Growing numbers of people on low and moderate incomes are being misled and even forced into using limited companies in order to obtain work, and risk being caught in anti-tax avoidance legislation, say tax campaigners. 10 November 2012
LITRG best practice compliance guide – how HMRC should conduct investigations A week after HMRC re-launched their Business Records Check (BRC) regime, one of a growing number of compliance initiatives, LITRG are publishing a best practice compliance guide encompassing everything that we believe HMRC should consider before starting a new initiative and when they are carrying out individual checks. 7 November 2012
Demographic change – the tax aspects The House of Lords Committee on Public Service and Demographic Change issued a call for evidence this summer inviting views on how population changes, particularly an ageing population, will impact on UK society. LITRG’s joint response with Tax Help for Older People highlights that the tax system is central to addressing future challenges. 1 November 2012
Umbrella schemes, etc – the risks to the low-paid worker On Sunday 21 October 2012 at 9 pm, BBC Radio 5 live reported on schemes operated by some recruitment agencies paying minimum wage workers partly by reimbursing allegedly tax-free expenses. But if the amount reimbursed is more than the worker has actually spent, or if the expenses turn out not to be allowable against tax, the low-paid worker risks being pursued by HMRC for the unpaid tax. 21 October 2012
Extra-statutory concession A19 review LITRG has responded to the HM Revenue and Customs (HMRC) consultation document ‘Extra-statutory Concession A19 review’. Extra-Statutory Concession A19 (ESC A19) gives HMRC discretion not to collect arrears of income tax and capital gains tax, if they have delayed in acting on relevant information. ESC A19 only applies where the taxpayer could have reasonably believed their tax affairs were in order. HMRC propose to replace this current test of reasonable belief with taxpayer responsibilities. 27 September 2012
Work and Pensions committee of MPs scrutinises universal credit As the influential House of Commons Work and Pensions Committee questions Government ministers about implementing their proposals for universal credit, also taking evidence from welfare rights and other bodies, our own evidence to the Committee sets out what we see as the main challenges facing this flagship reform. 18 September 2012
Morality, tax avoidance and the vulnerable Parliament spent a couple of hours last week debating the morality of tax in the context of avoidance and evasion. There was, however, one intervention in the debate which identified that morality and tax should not just be confined to the consideration of the approach to the multinational company and the wealthy. The tax treatment of the vulnerable is just as much a moral issue as the tax avoidance of the wealthy. 17 September 2012
‘Real Time Information’ requirements must allow for those unable to file online Tax campaigners are pressing HM Revenue and Customs (HMRC) for assurances that new obligations on employers to provide 'Real Time Information' (RTI) to the tax authorities will not penalise those who lack the means to file this information electronically. 14 September 2012
LITRG guide to tax credits available from Spiramus Press Victoria Todd and Robin Williamson of LITRG have written the LITRG Tax Credits Handbook 2012/13 which has now been published by Spiramus Press. 31 August 2012
When can a tax return not be filled in? LITRG is supporting the proposal that HMRC should have a statutory power to withdraw a notice to file a self-assessment return. 23 August 2012
Tax credits renewals – missed the 31 July deadline? The tax credits renewals deadline has now passed. But all is not lost if you missed the 31 July deadline, provided you take action quickly. 22 August 2012
Universal credit draft regulations need much more thought In commenting on the Department for Work and Pensions’ draft regulations on universal credit, LITRG have warned that many aspects of these regulations require much further thought. Overall, getting them to the state where they will support, and not detract from, Government policy objectives, and doing so in the time available, will be a considerable challenge. 2 August 2012
News release - Campaigners call for urgent rethink on self-employed rules under universal credit Campaigners for those on low incomes are calling for an urgent rethink on how small businesses and the self-employed will be dealt with under universal credit. 16 July 2012
PAYE tax calculations 2011/12 – what to do Employees and pensioners have tax taken off them throughout the year via Pay As You Earn (PAYE). In most cases, this means you pay the correct tax by the end of the year; but not always. LITRG’s updated guide explains what to do if HMRC send you a tax calculation (a ‘P800’) for 2011/12. 20 June 2012
HMRC letter to claimants about WTC stopping HMRC are writing to tax credits claimants whose working tax credit (WTC) payments were stopped on 6 April 2012 explaining that they may still be entitled to WTC and they should contact HMRC as soon as possible to reinstate their payments. This is in response to concerns raised by LITRG and other organisations. 19 June 2012
It is not often that we boast but ... At the LexisNexis Taxation awards yesterday, LITRG members between them received four awards which must be a record for a small team. All of us at LITRG are grateful of the support we receive from the general public, from HMRC, from the Chartered Institute of Taxation and in the case of yesterday, from the tax profession as a whole. 25 May 2012
Use of bailiffs by HMRC – need for improvements in debtor safeguards In our submission to the Ministry of Justice, supported by the Chartered Institute of Taxation and TaxAid, we focus on the use of bailiffs by HMRC, and ask whether the rights of debtors are really on a par with the rights and responsibilities of creditors and enforcement agents. 21 May 2012
HMRC launch special bereavement services Within the last month, HMRC have introduced extra support for people who need to contact them by telephone or post about their PAYE and self-assessment liabilities following a bereavement. They have also revised the form R27 which is used to finalise the tax affairs of a deceased person. 17 May 2012
5.1 million tax reconciliations – not errors HMRC has been attacked for making 5.1 million ‘errors’ in people’s 2011/12 tax. This is unfounded and derives from a misunderstanding of what the PAYE system is currently capable of achieving. As HMRC starts to send out notifications of up to 3.5 million refunds averaging £379 and up to 1.6 million underpayments averaging £537, we reflect upon how these occur and what HMRC can do to make PAYE more accurate during the year. 14 May 2012
‘Digitally excluded’ losing out as Government moves online - LITRG press release LITRG has today published a new report highlighting the growing problem of ‘digital exclusion’. It provides new evidence that government efforts to move services and transactions online are disadvantaging older people, those with disabilities and the self-employed in particular. 9 May 2012
HMRC “apps” initiative welcomed HMRC have been working in conjunction with software providers to provide "apps" (applications on smartphones) which enable small businesses to keep their records more easily. LITRG welcomes such "educational" initiatives which can show HMRC in a far more favourable light than some of their compliance campaigns aimed at the same businesses. 4 May 2012
Tax information obligations will present problems for small employers - LITRG press release The Low Incomes Tax Reform Group (LITRG) has said that HM Revenue and Customs’ (HMRC’s) assessment of the impact of the introduction of Real Time Information (RTI) on small employers is inadequate. LITRG is concerned that employers who lack internet access or who are not computer savvy will find it very difficult to fulfil their obligations under RTI. 26 April 2012
HMRC keep telephone callers waiting 30 minutes Over recent years HMRC have consistently failed to answer their telephone helplines in anything like a reasonable time-scale. Back in 1997/98 the Inland Revenue aimed to answer a telephone call within 30 seconds 91% of the time. But now, in 2012/13, you can spend four times as much time pushing buttons before you even get in a queue. The subsequent wait can be excessively costly for the caller on a low income. 11 April 2012
Tax credits changes in 2012 - the facts From tomorrow, the already very complicated tax credits system is undergoing more changes. Overall this will result in a second round of tax credits cuts, although not everyone will lose out. This article explains those changes in more detail. 5 April 2012
Selling things online? HMRC are after you HMRC have announced that they are now on the trail of people who buy and sell things online. They suspect that not everyone is paying the tax they should on their trading profits. Who is trading, and who is not, is often difficult to decide and the results of that decision have wider effects than just income tax or VAT. In this article we seek to shed some light on this complex area. 2 April 2012
Contact HMRC – or your tax credits might stop From 6 April 2012, HMRC will stop working tax credit for most couples with children who do not work at least 24 hours a week between them. This includes some who will still be entitled from 6 April because they are covered by one of the exceptions to this rule. HMRC have failed to tell these claimants that they must contact them by 6 April if one of those exceptions applies to them. 28 March 2012
Grannytax? A press storm is growing about the nature of changes to the age allowance provisions announced in the Budget, with some commentators characterising these as a Grannytax. We do not like the way the proposed changes have been introduced and explained, but we think this characterisation as a tax is misleading. 22 March 2012
Budget for those on low and middle incomes? Today the Chancellor said that he was delivering a Budget for those on low and middle incomes. Did he succeed? For those on the lowest incomes the answer must be “no”, for those on lower middle incomes the answer is “perhaps”. 21 March 2012
Campaigners welcome new exception for carers from tax credit cutbacks A coalition of charities working for carers and disabled people, led by the LITRG, very much welcome the Government’s decision to allow couples where one partner is entitled to carer’s allowance to continue getting working tax credit (WTC) by working just 16 hours a week. Without this change, they would have been required to work 24 hours a week, with one partner working at least 16 hours, or face losing WTC. 19 March 2012
Tax debt: not like ordinary debt As some football clubs are finding out, owing money to the tax man can be a significant problem. For people on low incomes tax debt is something to avoid, but if it happens then it needs to be dealt with quickly and knowledgeably. Tax charities, led by Tax Aid, have produced a series of videos to help you do just that. 14 March 2012
HMRC’s ‘Digital by Default’ response strikes right balance Having long advocated that digital by default should not mean compulsion, we are pleased that HMRC’s response to the Digital by Default consultation recognises the need to take an inclusive approach and not a mandatory, statutory one. However, we believe this approach should be consistent across all taxes, including VAT. 12 March 2012
Tax credits – listen to HMRC and lose thousands of pounds A misleading statement in an HMRC letter sent to over a million tax credits claimants may persuade people to leave the tax credits system. This could mean they miss out on future payments. Some people, such as those who are pregnant, or in danger of losing their jobs, or who want to take a new job and incur childcare costs, or may be disabled, could lose out on thousands of pounds as a result of misleading information from HMRC. 9 March 2012
Press Release - Pensioner tax simplification report welcomed by age-old campaigners The Low Incomes Tax Reform Group (LITRG) has welcomed the Office of Tax Simplification’s (OTS) interim report on pensioner taxation and looks forward to supporting the OTS’s ongoing quest for improvements 6 March 2012
Benefits for those who lose a partner – what does a 21st century system look like? The Government has consulted on a number of benefits issues over the last 18 months, claiming to be reviewing the welfare system and adjusting its design for the 21st Century. But do their plans really match their aims? 5 March 2012
Using tax data for child maintenance – LITRG concerns remain Draft regulations set out how the Government intends to base the new system of calculating child maintenance on tax data obtained direct from HM Revenue and Customs. LITRG is concerned that there will be gaps in the data and that child poverty could increase as a result. 27 February 2012
Modernising the personal tax system LITRG has welcomed a recent HMRC consultation on modernising personal tax and the ideas it contains for creating a more transparent system. It is good to look forward and consider how technology can enhance individuals’ understanding of their taxes, so long as due consideration is given to those without access to technology who might be left behind. 27 February 2012
Late filing penalties and reasonable excuse February is the month when HMRC issue most £100 penalty notices for late filing of self-assessment tax returns. For 2010/11 tax returns, the £100 fixed penalty is charged if HMRC have not received your tax return on time, even if you have no tax to pay or if you have already paid all the tax you owe. 20 February 2012
Are you an electrician needing to sort out your tax? HM Revenue and Customs (HMRC) have announced the Electricians Tax Safe Plan (ETSP) to encourage those who work in the electrical industry and who have not disclosed their earnings to HMRC to come forward. HMRC will soon follow this up by sending 50,000 letters to electricians who may have income to declare urging them to get their tax affairs in order. 17 February 2012
Can tax cuts alone make people better off? The Coalition Government has a policy of raising the personal tax allowance for the under 65s by stages to £10,000 per annum. In 2012/13 the allowance will have reached £8,105. The Lib Dem part of the Coalition wants the allowance to be raised faster and the £10,000 figure reached sooner than just before the next election. But how much does raising the tax allowance by itself improve the household finances of those on low to middle incomes? 8 February 2012
Did you miss the Self Assessment deadline? If you have missed the deadline for submitting a Self Assessment (SA) tax return and you can show that you should not have been in the SA regime in the first place, then you may be able to avoid any penalties. 7 February 2012
Check your 2012/13 PAYE coding notice Between mid-January and early March 2012, HMRC are issuing PAYE Coding Notices for the 2012/13 tax year. LITRG explains that you should check yours, and highlights particular points regarding ‘underpayment restrictions’ relating to tax for an earlier year. 1 February 2012
HMRC strike leads to extended filing deadline LITRG understands that the strike action planned by some HMRC staff on 31 January is to focus particularly on their telephone contact centres. As a result, HMRC say they recognise that some Self Assessment online customers who need to talk to them on 31 January may not be able to get through on the phone. 27 January 2012
Consolidated tax credits legislation now available for advisers Since 2002, there have been a large number of amendments to the tax credits legislation. For any advisers who need to understand the law as it applies today, the task of applying numerous pieces of amending legislation to the original versions is very time consuming and makes reliable interpretations extremely difficult. 26 January 2012
PAYE reforms could backfire for small employers and individuals We still have significant concerns about the impacts of the next stage of PAYE reform particularly for small and very small employers and vulnerable groups such as care and support employers. 19 January 2012
Child benefit and tax – uncomfortable bedfellows? Even if the Government solve the potential unfairness of withdrawing child benefit from a claimant immediately he, she or his or her partner or spouse becomes a higher rate taxpayer, that will still leave a host of administrative problems to resolve. At worst the new policy could spell the end of independent taxation, or become effectively a new tax on marriage. 18 January 2012

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