LITRG has fully supported the development of a 'Taxpayers’ Charter since the consultation process began.  In addition to responding to the first written consultation stage , we helped to organise focus groups to reach out to customers such as pensioners, migrants and young people to gain their views on the Charter.

We believe that the draft Charter published in the February 2009 consultative document  fails to address adequately the needs of HMRC’s most vulnerable customers: the unrepresented, low income taxpayer or benefits claimant.  

A recent consultation document from the Department for Children, Schools and Families (DCSF) outlines the Government’s four key aspirations to end child poverty by 2020 and the steps needed to achieve them.

LITRG’s response acknowledges the Government’s progress, but we remain concerned that insufficient attention is paid to various interactions in the tax, tax credit and benefit systems which create disincentives to work.

HMRC are proposing to bring Inheritance Tax record-keeping requirements and time limits for claims and assessments into line with other taxes.

LITRG has expressed reservations about this strategy, given that gathering information for Inheritance Tax returns is a difficult task often performed by friends or relatives of the deceased without help. 

Millions of people in the UK are at risk of being left behind in a world where technology is constantly moving forward, according to recent reports from the Department for Communities and Local Government (DCLG).

Action must be taken now to ensure that the so-called ‘digitally excluded’ are not disadvantaged as a result.

For two years, HMRC have been consulting on modernising their powers on debt collection, investigations, compliance, and charging penalties and interest.

In the latest round of consultation, LITRG is pleased to note that some of our recommendations have been taken on board, but we continue to press for adequate safeguards and suitable provision for unrepresented, low-income taxpayers. 

In running the tax system HMRC exercise certain general management powers (‘collection and management’) alongside the strict law.  This enables them to grant concessionary treatment in some cases where applying the law strictly would have an unduly harsh or unfair result.

HMRC have now announced that some of these concessions will be formalised in legislation. 

The Department of Health (DH) proposes to give local authorities the power to extend direct payments to those who lack the capacity to consent to their receipt.

In responding to this consultation, LITRG has again highlighted the need for HMRC, DH and the local authorities to consider how the recipients of the direct payments will comply with the statutory obligations, particularly payroll, that go with employing a carer.

As the tax appeals system is changing from April 2009, new rules and procedures are being devised.

LITRG feel there is some way to go in terms of arriving at a structure which adequately caters for unrepresented, low-income appellants.

Responding to the Department for Work and Pensions’ (DWP) Green Paper No-one written off: reforming welfare to reward responsibility, LITRG fully supports the Government’s wish to alleviate poverty and help more people into work.

But the Paper does not focus enough on the impact of its proposals across the whole of Government.

Taxpayers who have to submit PAYE, corporation tax or VAT returns will soon be required to file online, making HMRC the first government agency to compel ordinary citizens to use IT in meeting their compliance obligations.

In response to an HMRC policy document - Implementation of compulsory online filing, LITRG has called for paper filing to continue to be available to small employers, particularly those with limited IT capability or certain types of disability.

The tax credit system has attracted heavy criticism since its inception in 2003.

Whilst it has achieved many more things than its predecessors, LITRG believes that much more should be done to enable the system to reach its full potential.

In any new regime of interest and penalties, the key principle is that late payment may lead to an interest charge and late filing may result in a penalty, but in general there should be no overlap.  Although HMRC published separate consultations on each, it is our view that interest and penalties are closely-related issues.

The LITRG's response to the Interest - Working Towards a Harmonised Regime consultative document can be accessed below. 

In any new regime of interest and penalties, the key principle is that late payment may lead to an interest charge and late filing may result in a penalty, but in general there should be no overlap.  Although HMRC published separate consultations on each, it is our view that interest and penalties are closely-related issues.

The LITRG's response to the 'file and pay' consultative document can be accessed below. 

In June, HMRC began consulting on developing a new Charter to replace the old ‘taxpayers’ charters’ formerly published by the Inland Revenue and Customs and Excise prior to their merger.

Our response looks at how a properly developed, maintained and enforced Charter could improve the experience of HMRC’s low-income ‘customers

From April 2009, when taxpayers find themselves in dispute with HMRC, they will be able to ask HMRC to carry out an “internal review” of their case as a simpler and less costly alternative to appealing to the Tribunal.

But LITRG have warned that HMRC’s published ideas for the review are too complex and the process itself lacks the independence of an appeal directly to the Tribunal.

The Scottish Government have recently sought views on the possible replacement of council tax by a local income tax.

Drawing from our previous research we have indicated that we have significant concerns for those on low incomes and other vulnerable groups.

The Government’s Office for Disability Issues (ODI) has held a consultation on development of the Independent Living Strategy – the initiative to help more vulnerable and disabled people to live independently within the community.

In February, HMRC announced a consultation on changes to the way in which students’ tax is collected under Pay As You Earn (PAYE).

LITRG’s response builds on our earlier report, which recommended special arrangements for students.

On 22 April 2008, the Treasury Committee of MPs responded to the public furore about the withdrawal of the 10% starting rate of income tax by announcing an inquiry.

LITRG was pleased to be able to submit detailed written and oral evidence to the Committee, particularly as we had expressed concerns about the withdrawal of the 10% rate since it was first announced in the 2007 Budget. The Committee’s Report, Budget Measures and Low Income Households, was published on Saturday 28 June.

HMRC is proposing to harmonise and extend its powers. Although LITRG has no fundamental disagreements with the emerging approaches we do have concerns about the detail.

In our response to the latest consultations LITRG has called for taxpayer safeguards to be enshrined in law, not just reflected in internal guidance.

HMRC have just completed a consultation on whether employers should operate PAYE on benefits and expenses and whether the benefits rules for those earning less than £8,500 should be changed.

We have raised concerns about the impact of these proposals on some of the most vulnerable members of society. We have also recommended that further research is done before HMRC press ahead.

From April 2009, the projected reform of the tribunal system will embrace the tax appeal tribunals which hear disputes between taxpayers and HMRC. 

LITRG has responded to the Ministry of Justice’s latest consultation which asked for views on how the new two-tier system should be run.

As part of the reform of the tax tribunals scheduled for April 2009, HMRC has proposed an ‘internal review’ procedure to run concurrently with, or as an alternative to, an appeal.

LITRG’s response to this proposal is one of qualified support.

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.

The Treasury Sub-Committee of the House of Commons examined the Rt Hon Dawn Primarolo, Paymaster General, and HMRC officials on 14 March 2007, in a follow-up session on the administration of tax credits.

The Sub-Committee has called for written submissions in preparation for that session. In response, LITRG submitted two pieces of written evidence.

This additional submission to the Select Committee’s inquiry into reform of incapacity benefits and Pathways to Work gives a welcome to the overall intention of the welfare reform green paper to help people with disabilities and long term health problems to participate in employment, and draws attention to important issues that are missing from the Government’s analysis and proposals.  It expresses concern that the resources devoted to the planned changes in incapacity benefits seem unlikely to be adequate.

The Low Incomes Tax reform group welcomes an opportunity of contributing to the debate into local government funding and we have now made two representations to the Inquiry - an initial response and a further representation following the publication in December 2005 of a Consultation Paper and Interim Report.

The influential Treasury Sub-Committee  of  the House of Commons has started an inquiry into the way in which HM Revenue and Customs has administered the tax credits system, focusing on 'identifying future solutions to the difficulties which have plagued the system'.

The discussion paper describes how pensions choices will change after 5 April 2006. It considers the implications of current IHT law or where this is considered impracticable in any respect, asks for suggestions as to how it should be modified.

The crux of the paper is whether by deferring their pension, the scheme member is omitting to exercise a right and thereby diminishing their estate and potentially increasing that of  their dependants. The paper goes on to consider in what circumstances should an IHT charge be levied and how the system would work in practice.

The Low Incomes Tax Reform Group (LITRG) has expressed its full support for the proposals in the Disability Discrimination Bill to impose upon public authorities the duty to promote equality for disabled people.

In its response to the Department for Work and Pensions’ consultative paper ‘Delivering Equality for Disabled People’, the LITRG makes a number of recommendations.