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Do HMRC’s tax write-offs go far enough?

Man showing an empty pocket

Following the HM Revenue & Customs’ (HMRC) tax cock-up, almost a million of those who’d been accused of underpaying tax have been let off. But many will still be hit by a hefty bill owing to the mistake.

This week the HMRC admitted miscalculating almost six million tax bills over two years. Many are getting a refund after paying too much, but 1.4 million Brits are due to be hit by a sizeable bill for unpaid tax.

We asked whether you thought people should have to pay the tax back after the mishap, with most comments arguing that we shouldn’t. Well, it’s been announced that a huge chunk will have their repayment demands cancelled.

Underpayments of £300 or less will now be written off, up from the previous £50. This still only covers 40% of underpayments, leaving many with bills of as much as £1500, if not more.

As for these folk, Treasury Minister David Gauke has said that if they can prove ‘genuine hardship’, such as being a pensioner or jobless, their repayments can be spread over three years. Whether that’ll calm the fears of those being asked for a grand remains to be seen…

Apparently we owe about two billion pounds in total, which Guake argues the country can’t afford to write off. So many of us will get letters from the HMRC in the post (note – not by email or telephone) telling us we owe money by Christmas. Fair dues?

Comments
Profile photo of Nick Baker
Member

Listen to the Which? Money podcast for more on this.

Profile photo of Patrick Steen
Member

HMRC has now said that all those who have underpaid will now not be charged interest on their balance. I’m still not sure if that’s enough. http://bit.ly/bU6mg1