- Original Poster
- #1
I have highlighted that in many of the cases that we are seeing the underpayment of tax results from Incapacity Benefit not being taxed.
Now it seems that and I quote from the HMRC web site
As they know the details of the claim, the DWP is responsible for determining whether INCAPACITY BENEFIT is taxable and notifying the Revenue when a person starts to receive taxable benefit. If there is any doubt whether INCAPACITY BENEFIT is taxable, the person receiving the INCAPACITY BENEFIT should be asked to seek clarification from the DWP.
Source:
http://www.hmrc.gov.uk/manuals/eimanual/EIM76180.htm
And I repeat .
The DWP is responsible for determining whether Incapacity Benefit is taxable and notifying the Revenue
According to the DWP they have told HMRC of the Incapacity Benefit paid.
Why is that important?
For what is called an Extra Statutory Concession A19 appeal to be applied and the underpaid written off, HMRC must have failed to use information received about a source of income, within 12 months after the end of the tax year in which the information is received.
So if the tax payer was receiving Incapacity Benefit prior to 5 April 2008 then HMRC did fail to use the information received.
So they should uphold the appeal and write off the tax debt!
This is backed up by their own advice here .
Exceptional Circumstances
In exceptional circumstances, arrears notified less than 12 months after the end of the relevant tax year may be considered where both of the following apply:
http://www.hmrc.gov.uk/esc/esc.htm
HMRC have certainly allowed the tax arrears to build up over more than two year!
I have two questions .
Do you agree with this?
Why are HMRC not following their own rules?
Come on HMRC play fair.
Dont make the tax payer cough up for your error!
Now it seems that and I quote from the HMRC web site
As they know the details of the claim, the DWP is responsible for determining whether INCAPACITY BENEFIT is taxable and notifying the Revenue when a person starts to receive taxable benefit. If there is any doubt whether INCAPACITY BENEFIT is taxable, the person receiving the INCAPACITY BENEFIT should be asked to seek clarification from the DWP.
Source:
http://www.hmrc.gov.uk/manuals/eimanual/EIM76180.htm
And I repeat .
The DWP is responsible for determining whether Incapacity Benefit is taxable and notifying the Revenue
According to the DWP they have told HMRC of the Incapacity Benefit paid.
Why is that important?
For what is called an Extra Statutory Concession A19 appeal to be applied and the underpaid written off, HMRC must have failed to use information received about a source of income, within 12 months after the end of the tax year in which the information is received.
So if the tax payer was receiving Incapacity Benefit prior to 5 April 2008 then HMRC did fail to use the information received.
So they should uphold the appeal and write off the tax debt!
This is backed up by their own advice here .
Exceptional Circumstances
In exceptional circumstances, arrears notified less than 12 months after the end of the relevant tax year may be considered where both of the following apply:
- HMRC failed more than once to make proper use of information received about a source of income
- HMRC allowed tax arrears to build up over two whole tax years
http://www.hmrc.gov.uk/esc/esc.htm
HMRC have certainly allowed the tax arrears to build up over more than two year!
I have two questions .
Do you agree with this?
Why are HMRC not following their own rules?
Come on HMRC play fair.
Dont make the tax payer cough up for your error!
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